EUR/GBP Encounters Resistance Near 0.8650 Following UK Retail Data, Eurozone GDP in Focus

The EUR/GBP pair continues its downward trend for the third consecutive session, hovering around 0.8670 during Friday’s Asian trading hours. The currency cross faces some challenges following the release of mixed Retail Sales figures from the United Kingdom (UK). Attention now turns to the upcoming Eurozone Gross Domestic Product (GDP) data scheduled for later in the day.

On Friday, the UK’s Office for National Statistics (ONS) reported that Retail Sales increased by 0.6% month-over-month in July, surpassing the anticipated 0.2% rise and following a revised 0.3% growth in June. The annual consumer spending grew by 1.1%, falling short of the expected 1.3% increase but surpassing the previous growth of 0.9%.

The EUR/GBP cross may experience further appreciation as the Pound Sterling (GBP) potentially faces headwinds amid varied comments from Bank of England (BoE) officials. In his address to the Treasury Select Committee, BoE Governor Andrew Bailey stated that while the overall trajectory for interest rates remains downward, there is “considerably more uncertainty” regarding the pace of potential rate reductions. Conversely, BoE Deputy Governor Clare Lombardelli and monetary policymaker Megan Greene maintained a hawkish stance on the interest rate outlook, citing upside inflation risks.

The Euro (EUR) maintains its position ahead of the release of the Eurozone’s second-quarter GDP data. Analysts expect the seasonally adjusted Eurozone GDP to remain steady at 1.4% year-over-year and 0.1% quarter-over-quarter for Q2.

The Euro gains ground amid cautious sentiment surrounding the European Central Bank’s (ECB) policy outlook. On Tuesday, ECB board member Isabel Schnabel remarked that interest rates are already mildly accommodative, suggesting no immediate need for further rate cuts. Similarly, ECB Governing Council member Gediminas Šimkus stated that there is “no reason to adjust rates now.”

Economic Indicator Spotlight

Retail Sales (MoM)

The Retail Sales data, published monthly by the Office for National Statistics, measures the volume of goods sold by retailers to end customers in Great Britain. Changes in Retail Sales are widely regarded as an indicator of consumer spending patterns. The month-over-month (MoM) reading compares sales volumes in the current month with those of the previous month. Generally, a higher reading is considered positive for the Pound Sterling (GBP), while a lower reading is viewed as negative.

Release Date: Fri Sep 05, 2025 06:00

Frequency: Monthly

Actual: 0.6%

Forecast: 0.2%

Previous: 0.9%

Data Source: Office for National Statistics

Disclaimer: This information is provided for educational purposes only. Historical performance does not guarantee future results.