- Pound (GBP) rose after BE rate hike
- UK retail sales & PMI data due
- Euro (EUR) fell after weak consumer confidence
- EZ PMI data due
The Pound Euro (GBP/EUR) exchange rate is holding steady after gains yesterday. The pair rose 0.4% in the previous session, settling on Thursday at €1.1339 after trading in a range between €1.1279 – €1.1346. At 05:45 UTC, GBP/EUR trades -0.01% at €1.1338. The pair is set to rise 0.64% across the week.
The pound rose yesterday after the Bank of England raised interest rates by 25 basis points in line with expectations. This marked the 11th straight great tank and takes the lending rate to 4.25%, the highest level since 2008. divide split was seven in favour of a rate hike, while two dovish Policymakers voted in favor of leaving rates on hold.
The meeting came inflation in the UK rose to 10.4%, and the central bank wait up turmoil in the banking sector. The central bank also upwardly revised its GDP forecast for the year, forecasting modest growth after predicting a 0.4% contraction in the February report. The upward revision comes credit to the government’s extension of the energy price guarantee. This also means that inflation is expected to cool faster done initially expected.
Attention will now turn to UK retail sales, which are expected to rise at a slightly slower pace of 0.2% month on month in February after rising 0 .5% in January. Meanwhile, UK PMI data s expected to expand at a slightly slower pace of 52.8.
The euro fell in the previous session after eurozone consumer confidence unexpectedly fell in March. Consumer sentiment dips t -19.3 from -19.2. Analysts had expected consumer morale to improve to -18.3. Consumer conference has steadied ff after five straight months of improving. The downturn in morale came as the banking sector experience turmoil following the collapse of SVB in the US and fears of contagion in Europe.
Looking ahead, attention will turn to eurozone PMI data which is expected to show that business activity grew again in March, albeit at a very slow ace.