EUR/GBP holds positive ground above 0.8700 after UK employment data

• EUR/GBP strengthens around 0.8710 in Tuesday's early European session.
• UK Unemployment Rate climbed to 4.8% in three months to August; Claimant Count Change came in at 25.8K in September.  
• France's political crisis might cap the upside for the Euro. 

The EUR/GBP cross gathers strength near 0.8710 during the early European session on Tuesday. The Pound Sterling (GBP) weakens against the Euro (EUR) after the UK employment data. Traders will keep an eye on the Zew Survey from the Eurozone and Germany later on Tuesday.

Data released by the UK Office for National Statistics on Tuesday showed that the country's ILO Unemployment Rate rose to 4.8% in the three months to August, versus 4.7% prior. This figure came in above the expectations of 4.7% during the reported period. 

Meanwhile, the Claimant Count Change rose by 25.8K in September versus an increase of 17.4K prior. The GBP attracts some sellers in an immediate reaction to the UK employment report.  

On the Euro front, uncertainty stemming from political instability in France might exert some selling pressure on the EUR against the GBP. President Emmanuel Macron reappointed Sebastien Lecornu as Prime Minister, who has since formed a new cabinet. However, opposition leaders Marine Le Pen and Eric Ciotti have already filed a no-confidence motion in an attempt to oust Lecornu's government.

Traders raised their bets on future European Central Bank (ECB) rate cuts in the last few days, including late Friday, due to renewed trade tensions between the US and China. Markets have priced in nearly a 65% odds of a 25 basis points (bps) ECB rate cut by July, up from around a 45% chance on Friday before Trump's remarks on China tariffs, and a 35% possibility in early October.