- Pound (GBP) is rising for a sixth straight day
- BoE deputy governor Lombardelli warned that there are still risks to inflation
- Euro (EUR) falls on safe haven outflows
- US & China pause trade tariffs
The Pound-Euro (GBP/EUR) exchange rate is rising for a sixth straight session adding to gains last week. The pair rose 0.68% in the previous week, settling on Friday at €1.1830. It traded between €1.1716 and €1.1831. At 11:30, GBP/EUR trades 0.29% at €1.1865.
The pound is rising, boosted by the upbeat market mood owing to successful US-China trade talks over the weekend in Geneva.
The pound is also rising following hawkish comments from Bank of England deputy governor Clare Lombardelli. She warned that she was still cautious over the risks to inflation, although she did say that there were signs of inflation pressures in the UK continuing to weaken.
Glad Lamborghini voted to cut interest rates in the meeting last week, where the central bank reduced rates for a fourth time since August. She noted that progress on cooling domestic inflation pressures was a more important factor than the US trade tariffs for her decision to support a rate cut last week.
However, she added that wage growth was still too high to bring inflation to the Bank of England’s 2% target, meaning it’s sensible to continue with a gradual pace of rate cuts.
UK jobs data is due to be released tomorrow.
The euro is falling sharply as investors sell out of the currency, which had benefited from Trump’s trade tariffs. The euro had risen sharply as Trump announced Liberation Day trade tariffs, as it was almost considered by some as a safe haven in place of the US dollar, which came under immense pressure. As a result, it stands to reason that as the trade outlook improves following US-China trade talks at the weekend, the euro is giving back some of those safe-haven gains.
The eurozone economic calendar is quiet on Monday, and the market will look ahead to the DW economic sentiment figures, which will be released tomorrow, and GDP data later in the week.
