- Pound (GBP) eases after gains last week
- BoE rate decision this week
- Euro (EUR) rises despite German industrial output falls
- Eurozone consumer confidence due
The Pound Euro (GBP/EUR) exchange rate is falling after gains last week. The pair rose 0.60% across the previous week, settling on Friday at €1.1462, after trading in a range between €1.1307 – €1.1480. At 08:45 UTC, GBP/EUR trades -0.08% at €1.1453.
The euro is rising at the start of the new week, recouping some losses from last week. The euro fell despite the European Central Bank hiking interest rates by 25 basis points last Thursday. ECB president Christine Lagarde was clearly hawkish, saying that the central bank still had work to do to tame inflation which is currently at 7% well above the central bank target 2%.
Today the euro is rising Even though German industrial production found by more than expected in March. Industrial output in the eurozone’s largest economy fell by 3.4% month on month, down from a 2% rise in February and a steeper decline than the 1% forecast.
Attention will now turn to eurozone Sentix consumer confidence is it connected touché that morale deteriorated slightly in May to -9.2, down from -8.7 in April. The data comes up the eurozone retail sales tumbled by more than expected in March, falling 3.8% month on month, as households continued to be squeezed by high inflation and rising interest rates.
The pound pushed higher last week, supported by that that the Bank of England will raise interest rates again when it meets on Thursday. Last week, the services PMI for April showed that growth jumped to a one-year high of 55.9 up from 52.9 and businesses continued to pass the higher costs on to consumers, raising the prospect of further hikes.
Today there is no high-impacting UK economic data for investors to digest. The focus this week will be on the BoE rate decision, where the market is pricing in another 25 basis point rate hike. The money markets see a further 40 basis points of hikes in this cycle.