- Pound (GBP) rises to a year to date high
- BoE rate decision this week
- Euro (EUR) falls as recession fears rise
- ECB speakers in focus
The Pound Euro (GBP/EUR) exchange rate is rising after a flat session yesterday. The pair settled flat in the previous session at €1.1462, after trading in a range between €1.1432 – €1.1474. At 09:35 UTC, GBP/EUR trades +0.16% at €1.1480.
The pound rose to a year-to-date high against the euro overnight, boosted by the prospect of further rate hikes by the Bank of England later this week. The central bank is widely expected to hike interest rates by 25 basis points to 4.2%.
Elsewhere retail sales data from the British Retail Consortium showed that sales growth held steady in April, but high inflation meant that shoppers were getting less for their money. BRC so sales rise 5.1% year on year in April, the same increase that was seen in March. The data is not dusted for inflation, say the increase in sales actually masks a large drop in volumes.
Elsewhere UK annual house price growth slowed to a 10-year low according to the latest Halifax house price index. The data showed that house prices rose 0.1% in April, the smallest year on year increase since 2012. On a monthly basis, house prices fell -0.3%, the first drop this year.
The euro is falling as recession risks rise following weaker-than-expected data from Germany and the eurozone in the previous session.
Eurozone consumer confidence weekend by more than expected to – 13.1 in May from -9.2 in April. The data comes as households remain squeezed by high inflation and rising interest rates.
German industrial production was also weaker than expected falling 3.4% in March compared to the previous month, well below the 1.3% fall forecast. The weak data has fueled recession fears.
Today there is no economic data, instead investors will look ahead to speeches by European Central Bank chief economist Philip Lane and policymaker Isabel Schnabel. Comments regarding inflation of monetary policy could move the euro.