Euro's Momentum Fades Against Pound Ahead of German Data

The Euro's recent gains against the Pound Sterling have stalled, with the currency pair trading in a narrow band just below its recent highs. The Euro has been unable to break through the 0.8580 level reached last week and is currently holding steady at around the mid-0.8500s.

The next major test for the Euro comes on Tuesday when Germany releases its second-quarter Gross Domestic Product (GDP) figures, along with closely watched IFO business surveys. The headline IFO Business Climate index is expected to edge up to 87.2 in August from 86.6, while the current-conditions and expectations gauges also point higher.

The Pound Sterling has been relatively passive, with little on its docket to give it a lead. As a result, the cross's direction will be influenced by the relative outlook for the European Central Bank (ECB) and the Bank of England (BoE). For now, the Pound is holding firm enough to cap any Euro rebound.