GBP/EUR: Euro Rallies vs Pound On Policy Tightening Optimism

The pound euro (GBP/EUR) exchange rate is falling after gains yesterday.

The pound is falling as the market mood sours amid an escalation of tensions in the Middle East.

UK manufacturing PMI eased to 51.5 but manufacturers turned more pessimistic on worries regarding the upcoming Labour Budget.

The euro is falling against the USD but rising against the pound after eurozone inflation eased to 1.8% YoY, its lowest level in 3 years and below the ECB’s 2% target.

The data paves the way for the ECB to cut rates by a further 25bps later this month.