- Pound (GBP) falls for a fifth day
- UK house prices fell 0.1% MoM in February
- Euro (EUR) rises further after the ECB cut rates by 25 bps
- ECB could pause rate cuts in April
The Pound Euro (GBP/EUR) exchange is falling for a fifth straight day. The pair fell 0.06% in the previous session, settling on Thursday at €1.1941. It traded in a range between €1.1887 and €1.1964. At 07:30 UTC, GBP/EUR is trading -0.26% at €1.1910. The pair is set to lose 1.7% this week.
The euro is extending gains to a five-week high after the ECB cut rates by 25 basis points to 2.5% in line with expectations, signaling that its easing phase is nearing the end.
The rate cut marked the 6th time the central bank lowered rates since June as inflation cooled to 2.5% but amid rising uncertainty surrounding the outlook. ECB policymakers noted that the monetary policy stance was becoming meaningfully less restrictive. The changing language in the statement is fueling speculation that the central bank could pause rate cuts next month.
The markets considered the meeting less dovish, sending the EUR higher.
Today, attention will be on Eurozone GDP data, which is expected to confirm the earlier reading of 0.1% QoQ, meaning the region narrowly avoided a contraction at the end of last year.
The pound is falling after comments from Bank of England policymaker Catherine Mann. She considered that a pickup in inflation was unlikely to lead to longer-term price problems in the UK economy, and global volatility had weakened the case for a gradual approach to rate cuts.
UK inflation is expected to rise to 3.7% in the third quarter of this year from the current 3% level.
Separately, UK house prices unexpectedly fell in February, according to the latest data from Halifax.
House prices slipped 0.1% month on month in February after rising by a revised 0.6% in January.
The data comes after the UK construction PMI yesterday showed that house building plunged to its weakest level since the pandemic.
