- Pound (GBP) rises after three days of losses
- UK housing market improves
- Euro (EUR) falls after dovish ECB comments
- Greek central bank chief supported two rate cuts by the summer
The Pound Euro (GBP/EUR) exchange rate is rising after three days f. The pair fell -0.16% in the previous session, settling on Wednesday at €1.1714 and trading in a range between €1.1686 and €1.1716. At 10:00 UTC, GBP/EUR trades +0.25% at €1.1714.
The euro is falling in a quiet day on the economic calendar with attention firmly on ECB speakers.
Recent ECB speakers have been increasingly vocal about their support of an interest rate cut in the June meeting. This is in line with signals given by ECB president Christine Lagarde and the monetary policy meeting last week.
However, Greek central bank head Yannis Stournaras said in an interview today that around 30% of tightening has yet to penetrate into the real economy. As a result, he supports the need for the ECB to move interest rates lower more aggressively.
The eurozone economy had stagnated at the end of 2023, and inflation was ticking close to the ECB’s 2% target level, so there is some logic behind his decision to ease monetary policy and attempt to support the falling economy.
However, Stournaras went as far as to support two rate cuts before the summer break, which would take 50 basis points off the interest rate.
Meanwhile, the pound is pushing higher on signs that the UK housing market picks up in February.
According to the Royal Institution of Chartered Surveyors, the gauge for new buyer inquiries rose in February to the strongest joint level since February 2022. Meanwhile, its measure of house prices rose to -10% from -18%, marking the highest level since October 2022.
The recovery in the housing market is being driven by easing inflation and expectations that the Bank of England will start to cut interest rates this year. The market is pricing in a rate cut in the August meeting.
