- Pound (GBP) rises after two days of losses
- UK – US trade deal talks progress
- Euro (EUR) falls on trade tariff jitters
- Eurozone inflation cools to 2.2%
The Pound Euro (GBP/EUR) exchange is rising after two days of losses The pair fell 0.04% in the previous session, settling on Monday at €1.1943. It traded between €1.1933 and €1.1979. At 17:00 UTC, GBP/EUR is trading +0.18% at €1.1964.
The pound is rising on optimism that a deal between the UK and the US could prevent a significant economic impact from US tariffs, which President Trump is expected to announce tomorrow.
UK Prime Minister Keir Starmer reported that talks with the US on a trade agreement are well advanced, and these could help the UK being hit by import trade tariffs. Even so, Goldman Sachs cut its UK grateful cost over tariff spillovers, trimming 0.1% off the UK 2026 forecast.
Meanwhile, data showed that UK grocery inflation also rose in March compared to a year earlier. Kantar reported an annual grocery price inflation rate of 3.5%, up from 3.3% in the previous month’s report. Sales volumes also rose 1.8% over the same, which marked the slowest pace of growth since June last year.
Your air is under pressure amid caution ahead of tomorrow’s trade tariff announcements. The European Union is in the firing line given its large trade surplus with the US. However, details remain scarce, with Trump expected to implement tariffs of between 9% and 14%, focusing on industries such as pharmaceuticals, chip makers, lumber, and copper.
Strong tariffs could undermine the region’s already weak growth outlook.
Eurozone inflation decreased to 2.2% year-over-year in March, down from 2.3%. This was not just lower energy prices but also a notable decline in services inflation. This is a dovish sign for the ECB ahead of the potential trade war and the April ECB meeting, where the central bank is widely expected to cut rates by 25 basis points.