GBP/EUR: Gloomy Brexit News Weigh On Pound vs. Euro
  • Pound (GBP) struggled in quiet trade on Monday
  • UK house price data in focus
  • Euro (EUR) awaits inflation data
  • German retail sales is also in focus

The Pound Euro (GBP/EUR) exchange rate is holding steady after losses in the previous session. The pair fell -0.1% yesterday, settling on Tuesday at €1.1382, after trading in a range between €1.12368 – €1.1417. At 05:45 UTC, GBP/EUR trades +0.0% at €1.1382.

The euro pushed higher yesterday amid a quiet day owing to the public holiday and as investors looked ahead to a busy week’s economic calendar and the European Central Bank interest rate decision on Thursday.

Attention today is on eurozone inflation is expected to tick higher to 7% year on year in April, up from 6.9% in March. Meanwhile, core inflation, which strips out more volatile items such as food and fuel, is expected to hold steady at 5.7% year on year in April.

In addition to inflation data, German retail sales will also be in focus, and sales are expected to rise 0.4% month on month in March, after falling -1.3% in February.

The data comes ahead of the ECB interest rate decision later this week, where ECB policymakers are expected to weigh up both a 25 basis point and a 50 basis point rate hike. Hot inflation and stronger consumer spending could tip the balance towards a 50 basis point hike, lifting the euro.

The pound started the week on the back foot, again amid quiet trading owing to the long weekend. The pound remains supported by expectations that the Bank of England will continue hiking interest rates to tame inflation which remains elevated in the UK.

Today there is no high impacting UK data. Nationwide housing price data could shed some insight into the health of the housing market and the level of confidence in the UK. House prices are set to fall -0.4% month on month after falling -0.8% in March.