- Pound (GBP) rises for a fourth day
- BoE’s Jonathan Haskel will speak
- Euro (EUR) eases despite German consumer morale rising
- ECB Lagarde and Lane are to speak
The Pound Euro (GBP/EUR) exchange rate is rising for a fourth straight day. The pair rose +0.06% in the previous session, settling on Monday at €1.1524 and trading in a range between €1.1506 – €1.1553. At 09:00 UTC, GBP/EUR trades +0.05% at €1.1530.
The euro is falling despite an improvement in German consumer morale and as investors look ahead to a speech by ECB president Christine Lagarde and ECB chief economist Philip Lane.
According to GfK, German consumer confidence improved heading to December amid an improved willingness to buy as inflation eased.
The forward-looking consumer confidence index rose to -27.8 in December up from -28.3 in November. This was ahead of expectations of a further decline to -28.5 and marked the first brightening of sentiment after three straight months of decline.
Improving consumer confidence often goes hand in hand with an improved spending outlook, which adds inflationary pressures and supports the ECB’s stance on monetary policy.
The data comes as inflation in Germany has cooled to 3.8% year on year in October, down from 4.5% in September, and as the ECB left interest rates on hold at a record 4% last month.
ECB president Christine Lagarde is due to speak today. She’s not expected to deviate from her recent speeches where she has insisted that the fight against inflation is not over. ECB chief economist Philip Lane is also due to speak, and his comments will be watched closely for any clues over the future path of interest rates.
The pound is proving to be resilient after comments from Bank of England governor Andrew Bailey yesterday, who insisted that the central bank would not be cutting interest rates for the foreseeable future.
While inflation in the UK has cooled it’s still 2.5 times above the central bank’s target 2% level and Bailey warned that getting inflation back to the target level would be hard work from here.
He also raised concerns about the growth outlook for the UK, which suggests that gains in the pound could be based on shaky foundations.
There is no high impacting UK economic data today in fact the UK economic calendar is quiet across the week instead, today’s focus will be on Bo S Jonathan Haskell who is due to speak.
