GBP/EUR: UK GDP & EU Inflation Impacts Pound vs Euro

The pound euro exchange rate (GBP/EUR) is falling for a second day.

The pound is dropping after UK jobs data weakened. Unemployment unexpectedly rose to 3.9%, up from an 11-month low of 3.8%. Job vacancies fell for the 20th straight month. Meanwhile, basic wage growth slowed to 6.1% from 6.2%.

The data lifted BoE rate cut bets modestly, with the market pricing in almost 3 cuts this year.

The euro is rising despite German inflation cooling to a 2-year low of 2.5% YoY in February, down from 2.9% in January and 3.7% at the end of last year.

The ECB will look to cut rates when inflation cools to 2% in the region.