The EUR/GBP pair reversed its early session gains and slipped toward the 0.8730 mark during Monday’s European trading hours. The pair initially surged after the United States and the European Union confirmed a new trade agreement framework.
According to the deal, the US will impose a 15% tariff on EU imports—significantly lower than the 30% rate previously threatened by President Donald Trump earlier this month. The announcement eased concerns over a potential disruption in global trade flows, leading to broader market stability.
In addition, the agreement revealed that the EU plans to invest $600 billion in the US, supplementing its current financial commitments. Market attention now turns to key upcoming data from the Eurozone, including the preliminary July Harmonized Index of Consumer Prices (HICP) and second-quarter Gross Domestic Product (GDP) figures from major member states. These economic indicators will play a critical role in shaping expectations for the European Central Bank’s (ECB) policy direction for the rest of the year. Notably, the ECB kept its interest rates unchanged in last week’s meeting.
On the UK front, expectations are mounting that the Bank of England (BoE) will cut interest rates by 25 basis points at its upcoming policy meeting. This dovish sentiment is driven by signs of a cooling labor market, which have increased pressure on the BoE to adopt a more accommodative stance.
