- Pound (GBP) rises after losses last week
- UK PMI & retail sales data are due this week
- Euro (EUR) falls after recent strong gains
- IMF growth forecasts will be in focus
The Pound-Euro (GBP/EUR) exchange rate is rising on Tuesday after losses on Monday. The pair fell -0.4% in the previous session, settling on Monday at €1.1622. It traded between €1.1593 and €1.1676. At 09:00 UTC, GBP/EUR is trading 0.1% higher at €1.1631. The pair fell 1.35% last week.
The pound is edging higher on Tuesday as the market mood shows signs of improving. However, given President Trump’s volatile trade policies, sentiment remains extremely fragile.
While the pound is relatively flat against the euro, it is gaining against the US dollar up 11% since the start of the year.
The UK economic calendar is relatively quiet this week, with PMI data tomorrow and retail sales figures due on Friday. The Bank of England is expected to cut interest rates at the next meeting in May and could cut rates more aggressively throughout this year, given the deteriorating economic outlook owing to Trump’s trade policies.
The euro is easing modestly against the pound and is holding steady against the US dollar after strong gains in recent weeks. The euro has been a key beneficiary of U.S. dollar weakness, and the sell-America trade spared by Trump’s trade policies.
Today, attention will be on eurozone consumer confidence, which is expected to deteriorate further, falling to -15.6 from -14.5 in March.
Looking ahead, the International Monetary Fund spring meeting will begin at a time when global confidence slumps and trade turmoil looms. Last week, Kristalina Georgieva, the managing director of the IMF warned that the fund was preparing to cut growth forecasts as market volatility and trade policy uncertainty is literally off the charts.
Investors will be watching closely the IMF’s forecast for European growth. The ECB cut interest rates to 2.25% last week as it prepared for the fallout from trade wars warning that the outlook for growth has deteriorated.