pound-sterling-gbp-coin - GBP

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

The pound is under pressure after the BoE left interest rates unchanged at 5.25%. The vote split, 7-2, was more dovish than previously and suggests that the BoE is moving closer to cutting rates.

The market is now pricing in a 50% chance of a rate cut next month and is fully pricing in a 25 basis point rate cut in August.

The euro is rising despite a lack of fresh fundamental drivers. This week, data from Germany has been weaker than expected, suggesting that the road to recovery in its manufacturing sector could be long.