EUR/GBP softens to below 0.8650 after UK employment data

• EUR/GBP weakens to near 0.8640 in Tuesday's early European session. 
• UK Unemployment Rate steadied at 4.7% in three months to June; Claimant Count Change came in at -6.2K in July.
• Potential US-Russia meeting and the ECB's cautious stance might cap the EUR's downside.

The EUR/GBP cross loses traction to around 0.8640 during the early European session on Tuesday. The Pound Sterling (GBP) strengthens 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 steadied at 4.7% in the three months to June versus 4.7% prior. This figure came in line with the expectations of 4.7% during the reported period. 

Meanwhile, the Claimant Count Change decreased by 6.2K in July versus a decline of 15.5K prior (revised from 25.9K), below the consensus of 20.8K. The GBP attracts some buyers in an immediate reaction to the UK employment report.  

The EUR's front, potential talks between US President Donald Trump and Russian President Vladimir Putin in Alaska on Friday to end sanctions might provide some support to the shared currency. Kremlin aide Yuri Ushakov said on Thursday that Trump and Putin would meet in the coming days in what would be the first summit between leaders of the two countries since 2021.

Additionally, traders pushed back expectations for another reduction in borrowing costs from the European Central Bank (ECB) by three months. This, in turn, might cap the downside for the cross. Traders pared bets for a September cut and are only seeing odds of just over 50% for a quarter-point move at the end of the year.