EUR/GBP holds positive ground above 0.8400 after UK GDP data

• EUR/GBP trims recent gains to around 0.8430 in Thursday's early European session.
• UK preliminary GDP grew 0.7% QoQ in Q1 2025, stronger than expected. 
• Investors brace for the Eurozone Q1 GDP report, which is due later on Thursday.

The EUR/GBP cross pares recent gains near 0.8430 during the early European session on Thursday. The Pound Sterling (GBP) edges higher after the release of UK growth numbers. The attention will shift to the preliminary reading of Eurozone Gross Domestic Product (GDP) for the first quarter (Q1), which will be published later on Thursday.

Data released by the Office for National Statistics (ONS) on Thursday showed that the UK economy grew 0.7% QoQ in the first quarter of 2025, compared to a 0.1% increase in the fourth quarter of 2024. This figure came in better than the estimation of a 0.6% rise in the reported period.  

Meanwhile, the UK GDP expanded 1.3% YoY in Q1 versus 1.5% prior. This reading was above the market consensus of 1.2%. The monthly UK GDP arrived at 0.2% in March, following a 0.5% growth in February, stronger than the 0% expected. The GBP strengthens slightly in an immediate reaction to the upbeat UK GDP data. 

On the Euro front, the rising expectation that the European Central Bank (ECB) will deliver further interest rate cuts due to confidence that US tariff measures will not significantly raise inflation in the Eurozone might weigh on the shared currency. Financial markets see a 90% possibility of a rate cut in June and see another cut or two in subsequent months.