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The Euro/Sterling Pound (EUR/GBP) pair extended its ascent for the third consecutive day, circulating around the 0.8430 level during Asian trading on Friday. This sustained upward movement for the Euro follows the European Central Bank's (ECB) significant announcement on Thursday, where it delivered a widely anticipated 25 basis point interest rate cut, bringing the main refinancing rate down from 2.25% to 2.0%. This decision was largely in line with market expectations, preventing any major surprises. In its subsequent statement, the ECB reiterated its commitment to maintaining inflation stability at its medium-term target of 2%. Crucially, the central bank emphasized its intention to adopt a data-dependent approach, determining its monetary policy stance on a meeting-by-meeting basis, particularly in light of the prevailing uncertain economic environment. European Central Bank President Christine Lagarde, during her press conference following the meeting, underscored that monetary policy is "in a good position" and acknowledged that the current uncertainty in expectations is higher than ever. Lagarde also added a significant hint that the central bank is nearing the end of its monetary easing cycle, suggesting a potential pause in further rate cuts. This sentiment was echoed by other ECB policymakers, with Madis Müller, head of the Estonian Bank, indicating her agreement with President Lagarde that the "cash facilitation course is close to its end." Furthermore, Martins Kazaks, another ECB policymaker, stated, "It is very likely to stop stimulating in July," while also cautioning that despite inflation remaining below 2% for some time, vigilance is still necessary.

Despite the Euro's recent gains, the exchange rate of the Euro/Sterling Pound may face challenges ahead, as the British Pound (GBP) could find support from an improvement in risk sentiment within the UK market. This improved morale stems from a recent executive order signed by US President Donald Trump on Tuesday, which temporarily exempts UK exports of steel and aluminum from the steep 50% US customs duties. While the UK still has to contend with the previous 25% customs duties, this partial exemption provides a degree of relief compared to other nations facing the higher tariff. This nuanced development could provide a floor for the Pound, potentially limiting further upside for the EUR/GBP pair as the market digests the implications of both central bank policies and evolving trade relations.