EUR/GBP Slips Below 0.8450 Ahead of Key UK Jobs Data

EUR/GBP Slips Below 0.8450 Ahead of UK Jobs Data

The EUR/GBP currency pair continues its losing streak into Monday’s European session, falling to near 0.8420, down for the second consecutive day. The Euro (EUR) is pressured by trade tensions and cautious sentiment surrounding European Central Bank (ECB) policy expectations, while traders brace for the upcoming UK jobs report due Tuesday.

ECB’s Policy in Focus as Lagarde Stresses Caution

Last week, the ECB cut its key interest rates by 25 basis points, signaling the start of a potential easing cycle. However, President Christine Lagarde over the weekend emphasized that rates are in a "good position" amid global economic uncertainty—particularly stemming from fresh tariff threats by the United States.

Despite these reassurances, concerns persist among investors that economic growth in the Eurozone could be dented if US trade protectionism escalates.

US Tariff Hike Adds Pressure to the Euro

The Trump administration’s decision to double tariffs on Eurozone steel and aluminium imports to 50% has weighed on the Euro. While the UK is exempt from this increase until July 9, the broader Eurozone exposure to these duties casts a shadow over EUR sentiment. Markets fear retaliatory measures and slowing EU exports may follow, pushing EUR/GBP lower.

UK Labor Data on Deck

Markets now turn their attention to the UK employment data, scheduled for release on Tuesday. A strong reading could bolster the British Pound (GBP) further, potentially accelerating EUR/GBP’s downward move. Analysts expect any upside surprise in UK wage growth or job creation to increase speculation around future Bank of England policy tightening.

Technical Outlook

The EUR/GBP pair remains weak below the 0.8450 handle, and a decisive break below 0.8400 could open the door for further losses toward 0.8340 (April low). Resistance is seen near 0.8465, the 20-day EMA.

Related Tredu Reads:

• UK Jobs Report Preview: What to Expect
• ECB Cuts Rates, Lagarde Says Inflation Still High
• US Tariff Hike on EU Goods: What It Means for the Euro

Conclusion

EUR/GBP’s direction this week will hinge on the interplay between UK labor data, ECB tone, and geopolitical risk from the renewed US-EU tariff conflict. While Lagarde remains cautiously optimistic, the market is not convinced just yet.