The pound euro (GBP/EUR) exchange rate is edging lower towards €1.1425 after three days of gains.
The pound was supported yesterday by BoE’s Andrew Bailey suggesting that a UK recession could be shallower than initially expected and that inflation could fall rapidly from the Spring.
UK retail sales data is due and is expected to show sales rebounded in December, rising +0.5% MoM after falling -0.4% in November.
The euro was lifted yesterday by ECB President Christine Lagarde who said that inflation was too high and rates needed to rise further.
Today attention is on German wholesale inflation which analyst forecast will cool to 20.8% YoY, down from 28%.