EUR/GBP lacks strength to extend its recovery above 0.8450 as France faces political uncertainty.
ECB Knot supports for keeping interest rates steady in July but is open for the September meeting.
The Pound Sterling remains firm as UK Keir Starmer’s victory brings political stability.
The EUR/GBP pair struggles to extend recovery above the immediate resistance of 0.8450 in Tuesday’s early European session. The upside in the cross appears to have been limited by French’s political uncertainty as the Left Wing, also known as New Popular Front, led by Jean-Luc Melenchon unexpectedly gained an upper hand with President Emmanuel Macron's centrist alliance and Marine Le Pen-led-Far Right National Rally as runner ups.
Market participants expect that the Central Alliance will join hands with the Left Wing to form a coalition government, which will pass through significant negotiations for distribution of new ministers. While fears of widening French debt crisis have eased as Far Right fails to make an absolute majority, which was expected to have favored expansionary fiscal measures.
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