- Pound (GBP) holds steady after rising yesterday
- FCA survey sees signs of the cost of living crisis easing
- Euro (EUR) holds steady ahead of the ECB meeting
- ECB are expected to leave rates unchanged.
The Pound Euro (GBP/EUR) exchange rate is holding steady after gains yesterday The pair rose +0.20% yesterday settling on Tuesday at €1.1673 and trading in a range between €1.1648 to €1.1683. At 18:00 UTC, GBP/EUR trades +0.01% at €1.1675.
The pound is holding steady after an FCA survey on Wednesday showed that the cost-of-living crisis is starting to ease. The number of people struggling to pay bills and credit repayments is falling, and the number of people coping well is rising.
According to the FCA’s latest Financial Live survey, 7.4 million people living in Britain were struggling to pay bills and credit card repayments. This was down from 10.9 million in January 2023. However, the figure is still higher than the 5.8 million from February 2020 before the cost-of-living crisis started.
The FCA data comes as Tesco, the UK’s largest supermarket, also reported improving consumer sentiment as inflation eased and employment levels remained strong. CEO Ken Murphy made these comments as the group reported encouraging annual results.
The improving sentiment comes as inflation cooled to 3.4% YoY, its lowest level since 2021.
The euro is holding steady on Tuesday amid a quiet day for the economic calendar and as investors look cautiously ahead to the ECB interest rate decision tomorrow.
The European Central Bank is expected to leave interest rates unchanged at a record high 4% level but could signal again to a June rate cut.
Inflation has cooled significantly and is now near the central bank’s 2% target.
President Christine Lagarde signaled that June could be a possible starting point for rate cuts at the previous ECB meeting. Governing council members have also previously cited the need to evaluate fresh wage data, which is due in May, before deciding to cut rates.
The market is pricing in 79 basis point cuts from the ECB in 2024, equivalent to 325 basis point rate cuts.
