- Pound (GBP) looks to a weekly gain
- BoE left rates unchanged & noted rising uncertainties
- Euro (EUR) falls amid a quiet calendar
- ECB President Lagarde warned of GDP hit from a trade war
The Pound Euro (GBP/EUR) exchange is falling after two days of gains. The pair rose 0.18% in the previous session, settling on Thursday at €1.1943. It traded between €1.1915 and €1.1977. At 12:30 UTC, GBP/EUR is trading -0.04% at €1.1938.
The pound is on track for a weekly gain against the euro amid the Bank of England’s decision yesterday to leave interest rates unchanged whilst noting concerns about rising global trade tensions.
Bank of England governor Andrew Bailey warned over the lack of clarity regarding the outlook for the UK economy owing to Trump’s trade tariffs.
The UK has escaped most of Trump’s trade tariff rhetoric. The next round of reciprocal tariffs will take place in early April, and there is potential for the effect to spill over into the UK economy, although to what extent remains to be seen.
Looking ahead to next week there is plenty of UK data to digest including inflation figures, PMI data as well as GDP numbers. The focus will also be on Chancellor Rachel Reeves who is expected to announce cuts to her spending plans in next week’s Spring Statement.
The euro is edging lower against both the pound and the US dollar and is set to fall across the week. The euro’s pullback came after European Central Bank president Christine Lagarde warned on Thursday of weaker growth due to Trump’s trade tariffs, but it played down the risk of higher inflation if the European Union retaliated.
Looking ahead to next week, Monday’s PMI data could provide some clarity over the health of the eurozone economy, which has been stagnating. The February composite PMI, which is considered a good gauge for business activity, was 50.2 last month, and the figure 50 separates expansion from contraction. Weak data could pull the EUR lower.