• EUR/GBP gains ground around 0.8685 in Tuesday’s early European session.
• UK Unemployment Rate steadied at 5.1% in three months to November; Claimant Count Change came in at 17.9K in December. 
• Signs that the ECB appears to be near the end of its rate-cutting cycle support the Euro.

The EUR/GBP cross holds positive ground near 0.8685 during the early European session on Tuesday. The Pound Sterling (GBP) softens against the Euro (EUR) after the UK employment data. Traders will take more cues from the speech by the European Central Bank (ECB) policymaker Joachim Nagel later on Tuesday. 

Data released by the UK Office for National Statistics on Tuesday showed that the country’s ILO Unemployment Rate stayed at 5.1% in the three months to November, versus 5.1% prior. This figure came in above the market consensus of 5.0% during the reported period. Meanwhile, the Claimant Count Change rose by 17.9K in December versus a decrease of 3.3K prior. The mixed UK employment report failed to boost the GBP against the EUR. 

Traders will closely monitor the release of the UK Consumer Price Index (CPI) inflation data for December, which is due on Wednesday. This report could offer some hints about the Bank of England’s (BoE) monetary policy outlook. 

The European Central Bank (ECB) signaled it is on a steady rate path for now, with no near-term debate on further rate changes if current economic projections hold. This, in turn, could provide some support to the Euro in the near term. 

The ECB has kept rates on hold since ending a rate cut cycle in June 2025 and hinted at the December policy meeting that it was in no hurry to change policy again. The Governing Council will continue to follow a "data-dependent and meeting-by-meeting approach," without pre-committing to a specific future rate path. ECB officials further stated that decisions will be based on the assessment of the inflation outlook.