- Pound (GBP) rises for a second day
- BoE Chief economist to speak
- Euro (EUR) fell after a mixed bag of data yesterday
- German industrial production data is due
The Pound Euro (GBP/EUR) exchange rate is rising for a second straight day. The pair rose 0.43% at the start of the week, settling on Monday at €1.1209, after trading in a range between €1.1155 – €1.1224 At 05:45 UTC, GBP/EUR trades +0.12% at €1.1222.
The pound pushed higher in the previous session, helped higher by hawkish comments from Bank of England policy maker Catherin Mann. In a speech, one of the MPC’s consistently most hawkish rate-setters said that inflation would likely remain higher than the central bank forecasts and that the central bank would likely raise interest rates again at the upcoming meeting in March.
Her comments come after the Bank of England raised interest rates by 50 basis points last week but also downwardly revised the inflation forecast for 2023 to just below 4%.
Today once again, their UK economic calendar is on the light side. Instead, investors will be looking ahead to a speech by Bank of England chief economist Huw Pill.
The euro fell in the previous session after strong gains last week as investors digested a mixed bag of data. German factory orders rose by more than expected in December, bringing the latest sign that Europe’s largest economy may avoid a recession. Demand jumped 3.2% month on month, well ahead of the 2% increase forecast. this was also up from a -4.4% decline in November.
Meanwhile, Centex eurozone investor confidence also improved by more than expected, rising 2 -8.0 in February, up from -17.5 in January and ahead of the -12.8 forecast.
However, it wasn’t all good news, and eurozone retail sales fell by more than expected, dropping 2.8% month on month, worse than the 2.7% decline forecast and down from the 1.2% increase seen in November.
The data comes as consumer confidence is actually on the rise, but inflation remains high, and interest rates are also increasing, which is squeezing household incomes.
Looking ahead today, the eurozone economic calendar remains in focus with the release of German industrial production data, which is expected to decline 0.6% month on month in December after rising 0.2% in November.