Euro trims gains against British Pound despite moderately positive Eurozone PMI data

• EUR/GBP pulls back from session highs at 0.8635, which keeps the pair close to monthly lows at the 0.8620 area.
• Eurozone preliminary PMIs have shown a moderate improvement in business activity in June.
• The Pound remains steady with investors at ease with PM Starmer's exit.

The Euro (EUR) pares previous gains against the British Pound (GBP) on Tuesday. The EUR/GBP pair has depreciated nearly 0.6% over the last two days and remains below 0.8635, unable to take off from levels just above monthly lows, despite above-expectations Eurozone HCOB Purchasing Managers Index (PMI) figures and the resignation of UK Prime Minister, Sir Keir Starmer.

Eurozone preliminary PMI data for June revealed that manufacturing activity slowed down to 51.3, from 51.6 in May, yet slightly above the 51.2 expected, while business activity in the services sector improved to 48.9 from 47.7, beating expectations of a 48.1 reading. The Composite PMI has risen by a whole point, to 49.5 from 48.5, also above the market consensus of a 49.1 reading.

Data from Germany released earlier on the day, however, was somewhat softer, putting some negative pressure on the Euro. German Manufacturing PMI stalled in June, at 50, after a 50.1 reading in the previous month, while services activity contracted at a 46.8 pace, from 48.1 in May, against market expectations of a mild improvement to 48.7. The Euro ticked lower following the data release.

In the UK, in a few minutes, S&P Global will release the preliminary PMIs for June. Services activity is seen edging higher to 50, from 49.3 in May, while the manufacturing sector is expected to have slowed down to 53.6 in June from 53.9 in May.

Apart from that, the Pound has remained fairly steady after the resignation of the UK Prime Minister Keir Starmer. Investors seem at ease on the prospects of an orderly handover of power, with Manchester Mayor Andrew Burnham emerging as the best-positioned candidate and Labour Party leaders racing to enter in the next cabinet.