Anna 
In European trading, the GBP/USD pair advanced 0.1% to 1.2730, with the British pound retaining its robust stance following Wednesday’s data, which indicated that UK inflation declined by a smaller margin than anticipated in April.
Prime Minister Rishi Sunak’s announcement of a national election, widely expected to result in a victory for the opposition Labour Party after the Conservative Party’s 14-year tenure in power, had limited impact on the pound’s performance.
“The pound also seems to have been only very lightly impacted by the news,” remarked ING, noting that potential volatility-inducing factors associated with UK politics, such as UK-EU trade relationships, unfunded budget spending, and the Scottish referendum, are now viewed as marginal risks.
Meanwhile, the EUR/USD pair edged 0.2% higher to 1.0839 following reports of accelerated business activity in the eurozone, reaching its fastest pace in a year this month.
HCOB’s preliminary composite Purchasing Managers’ Index (PMI) climbed to 52.3 this month from April’s 51.7, surpassing expectations for a more modest increase to 52.0. This growth was driven by strong demand for services, while the manufacturing sector displayed signs of nearing a recovery.
With the European Central Bank signaling the commencement of its rate-cutting cycle next month, the current discourse revolves around the potential number of additional cuts policymakers may endorse later this year.
