EUR/GBP wobbles around 0.8630 amid uncertainty over US-EU trade deal

• EUR/GBP trades sideways 0.8625 amid uncertainty surrounding trade discussions between the US and the EU.
• The EU aims to reach a trade framework with the US by August 1.
• BoE warns of diminishing investors' appetite for UK's riskier assets.

The EUR/GBP pair trades in a tight range around 0.8625 during the European trading session on Thursday. The cross consolidates as the Euro (EUR) struggles for directions, with investors staying on sidelines amid uncertainty surrounding the trade deal between the European Union (EU) and the United States (US).

27-nations led EU Commission President Ursula von der Leyen has stated that the continent is constantly in contact with Washington to secure a deal before the tariff deadline, which has been extended to August 1. However, she warned that the EU should be prepared for all scenarios.

"We stick to our principles, we defend our interests, we continue to work in good faith, and we get ready for all scenarios," von der Leyen told the European Parliament on Wednesday, Reuters reported.

Meanwhile, European Parliament's trade committee head Bernd Lange has also stated that the EU is aiming to reach a framework agreement with the US by the deadline. Lange stated that negotiations with Washington emphasize securing lower tariffs and establishing a "stand-still clause" that would prevent further trade measures against the EU.

Although the United Kingdom (UK) economy is safe from trade tensions with the US as it has already secured a deal, escalating domestic economic risks are limiting the Pound Sterling's (GBP) upside.

On Wednesday, the Bank of England (BoE) warns of major risks in its mid-year Financial Policy Committee (FPC) review, such as sharp falls in risky asset prices and abrupt shifts in asset allocation.