EUR/GBP Rises To Around 0.8500 As French Voters Back Marine Le Pen’s National Rally

EUR/GBP extended its gains for the third day in Asia on Monday, hovering around 0.8500. Marine Le Pen’s National Rally party confirmed its status as the dominant political force in France in the first round of legislative elections, recording the highest turnout in three decades. While Le Pen’s party achieved a clear but not decisive victory, an uncertain outlook for the election remains ahead of the second round on July 7, according to France 24.

Meanwhile, Olli Rehn, a member of the European Central Bank (ECB) Governing Council, said last week that the central bank could cut interest rates two more times this year. The latest data showed that France’s annual inflation rate fell in line with expectations to 2.5%, while Spain’s inflation fell to 3.5%, slightly higher than expected. In contrast, Italy’s inflation rose to 0.9%, in line with expectations. In addition, Germany’s consumer price index (CPI) data is scheduled to be released on Monday.

In the UK, the upcoming general election on Thursday may cause fluctuations in the EUR/GBP crossover. The opposition Labour Party is expected to defeat the Conservative Party led by British Prime Minister Rishi Sunak, according to the latest exit polls.

The UK’s first quarter gross domestic product (GDP) data (quarter-on-quarter) was revised up to show that the gross domestic product grew by 0.7% in the first quarter, higher than the previous value of 0.6%. This marked the strongest growth in the UK economy in more than two years and caused the UK 10-year government bond yield to rise to 4.17%, weakening expectations of a rate cut.

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