euro-bank-notes - EUR

The pound euro (GBP/EUR) exchange rate is heading lower after gains yesterday.

The pound is falling in risk off trade and despite hotter than expected UK inflation.

UK CPI cooled to 8.7% YoY in April, down from 10.1% but above the 8.2% forecast. The data ramps up pressure on the BoE to hike rates again.

The IMF warned of Britain being a risk from persistently high inflation.

The euro is rising as risk appetite wanes. Attention turns to German IFO business climate data which is expected to cool to 93.

The data comes after German PMI data yesterday was mixed. The manufacturing sector contracted further while the services sector showed strong growth in May.