- Pound (GBP) rises on a new NI Brexit trade deal
- BoE policymakers to speak
- Euro (EUR) falls despite improved consumer confidence
- Spanish & French inflation data due
The Pound Euro (GBP/EUR) exchange rate is rising for a third straight day. The pair rose 0.40% in the previous session, settling on Monday at €1.1378, after trading in a range between €1.1317 – €1.1379. At 05:45 UTC, GBP/EUR trades +0.06% at €1.1375.
The pound is on the rise after UK Prime Minister Rishi Sunak agreed a Northern Ireland post-Brexit trade deal with the European Union.
European Commission president Ursula von der Leyen and UK Prime Minister Rishi Sunak agreed to ease trade rules for the Northern Irish province and give its lawmakers more control over the laws they must follow in the so-called “Windsor framework”.
Northern Ireland protocol had been one of the most contentious issues surrounding the UK’s exit from the European Union in 2020. The deal comes as Sunak looks to secure a compromise and improve relations with both Brussels and the United States without angering his critics within the party.
The success of the deal still depends on whether it goes far enough to end the political deadlock in Northern Ireland.
Looking ahead, today, there is no high impacting UK economic data instead, there are plenty of Bank of England officials who are due to speak, including Huw Pill, Catherine Mann, and Jonathan Cunliffe.
The euro fell yesterday despite eurozone consumer confidence improving to a yearly high in February. Consumer morale rose to -19, confirming the preliminary reading. A strong labour market cooling inflation and improving energy situation in the region is helping households feel more confident about the outlook of their personal finances and the economy.
This week inflation data will be very much in focus after core inflation unexpectedly rose in January. Investors will be looking closely to see whether it stays sticky in February. While the euro zone-wide inflation reading isn’t until Thursday, today inflation data from France, as well as Spain, is due.
Hotter than forecast inflation could raise concerns of the ECB hiking interest rates higher for longer.
