- Pound (GBP) holds steady but gains across the week
- UK consumer inflation expectations
- Euro (EUR) falls across the week
- ECB cut rates by 25 bps
The Pound Euro (GBP/EUR) exchange rate is holding steady after gains yesterday. The pair rose 0.07% in the previous session, settling on Thursday at €1.1849 and trading in a range between €1.1829 and €1.1854. At 21:00 UTC, GBP/EUR trades -0.03% at €1.1846. The pair rose 0.1% across the week after losses last week.
The pound hardly moved against the euro on Friday, amid another relatively quiet day for the
UK economic calendar: the calendar has been relatively sparse at the end of this week. The only figure that the market had to digest was UK consumer inflation expectations, which cooled to 2.7%, down from 2.8%. While this is still significantly above the Bank of England’s 2% target level for inflation, it is at least trending in the right direction.
Instead, attention is turning firmly to next week, when the UK inflation data will be released ahead of the Bank of England’s interest rate decision on Thursday.
The Bank of England is widely expected to leave interest rates unchanged after cutting by a quarter of a percent in the August meeting.
The euro is unchanged on Friday but is set to fall against the pound throughout the week. This is a week in which the ECB cut interest rates for a second meeting. The central bank reduced interest rates by 25 basis points and also downwardly revised the growth forecasts for the region.
Recent data from the eurozone region, and more particularly from Germany, have pointed to a deteriorating economic outlook.
Still, the ECB refrained from setting a formal cutting timetable and instead reiterated that they were data-dependent.
Looking ahead the euro area economic calendar is quiet area next week which could leave sentiment to drive movement in the common currency.
