The pound euro (GBP/EUR) exchange rate is falling for a third day towards €1.1850.
The pound is falling despite hotter-than-expected inflation data. UK CPI rose to 3.5% YoY up from 2.6% and ahead of expectations of 3.3%.
Service sector inflation rose to 5.4%, well ahead of the 4.8% forecast.
The data means a June rate cut is unlikely and supports a more hawkish stance from the Fed.
The EUR is rising amid a risk-off market mood and despite dovish ECB expectations.
The ECB is expected to cut rates again in June. The growing rate differential between the ECB and BoE could limit the downside to GBP/EUR.
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