EUR/USD maintains its cautious trading stance around 1.0850 during the European session on Friday. Despite various economic factors at play, traders are holding back from making new investments due to the looming German spending deal and ongoing US-EU trade tensions. The currency pair remains largely unaffected by external data, including economic figures from the UK and US.
The UK released its latest economic data, revealing a contraction of 0.1% in Gross Domestic Product on a monthly basis in January. Additionally, Manufacturing Production fell by 1.1%. These figures have put pressure on the Pound Sterling, as GBP/USD loses traction, edging toward 1.2900 in the European session on Friday. The data highlights the challenges faced by the UK government, which is in dire need of higher economic growth while managing spending cuts and potential tax increases later this year.
Despite these developments, EUR/USD remains unperturbed by the UK's economic data. Instead, attention is focused on the potential impact of tariff headlines concerning US-EU trade relations. The market is keenly watching any news that could influence trends in the currency pair.
Similarly, EUR/USD shows resilience against US Consumer Sentiment data, indicating that traders are prioritizing macroeconomic events closer to home, such as the anticipated German spending deal. This event is seen as a significant factor influencing trader sentiment and decision-making.