- Pound (GBP) is falling, extending last week’s losses
- UK economic calendar is quiet after weak retail sales on Friday
- Euro (EUR) rises in quiet trade
- EZ consumer confidence data tomorrow
The Pound Euro (GBP/EUR) exchange rate is falling after losses yesterday. The pair fell 0.30% in the previous week, settling on Friday at €1.1873 and trading in a range between €1.1855 and €1.1929. At 18:00 UTC, GBP/EUR trades -0.06% at €1.1866.
The pound is drifting lower after losses in the previous week amid a quiet economic calendar.
Data last week was mixed. The market digested softer-than-expected retail sales and wage growth, which fell to a two-year low, but service sector inflation remained sticky at 5.7% year on year. Although headline inflation remained at 2%.
The data failed to clarify whether the Bank of England will cut interest rates in August or, potentially, in September.
Today was a quiet day for economic data, and investors will wait until business activity figures later in the week for further clues about the health of the UK economy.
Business activity data, as measured by PMI, are expected to show that both the service and manufacturing sectors grew at a faster pace in June. The market will be paying particular attention to the prices paid subcomponents, which provides further clues over whether service sector inflation could be cooling.
The euro is drifting higher in a quiet session amid a lack of fresh fundamental data to drive movement.
Last week, the ECB left interest rates unchanged at 3.75%, in line with expectations. ECB president Christine Lagarde refused to commit to a set path for interest rate cuts.
However, today, the Slovakian central bank governor Peter Kazimir said that the market pricing in two rate cuts this year isn’t misplaced.
There is no major economic release today. Attention will turn to consumer confidence figures tomorrow.
