EUR/GBP slips as strong PMIs cancel out and Iran signals de-escalation

The Euro (EUR) has weakened against the British Pound (GBP), with the EUR/GBP exchange rate trading mid-0.8500s on Friday. This decline occurred despite strong Purchasing Managers Indexes (PMIs) from both the Eurozone and the United Kingdom, which were positive for both currencies. The Eurozone composite PMI reached a nine-month high, with manufacturing activity hitting its highest level in over four years.

However, German services were slightly negative, keeping the Euro's outlook mixed. In the UK, the composite PMI also beat expectations, driven by services, while manufacturing softened. The negative US retail sales data did not negatively impact the British Pound. Iranian President Masoud Pezeshkian stated that Iran seeks to end its conflict with the US, from a position of strength, as the world recognizes Iran's victory.

This statement has contributed to the de-escalation sentiment in the Middle East, which has kept European currencies on a relatively tight leash this week. Technical analysis shows EUR/GBP trading at 0.8563, with support near 0.8563 and resistance around 0.8565-0.8571. EUR/USD is slightly under pressure, trading in the low 1.3600s, after reaching fresh highs above 1.3670 earlier in the week.