The pound euro (GBP/EUR) exchange rate is falling on Friday and is set to book losses across the week.
The pound is under pressure ami rising expectations that the government’s U-turn on welfare cuts could mean more tax hikes later this year.
Tax increases are deflationary, and as a result, the BoE may cut interest rates more aggressively, which is weighing on the pound.
The EUR is rising despite weaker-than-expected data. German factory orders fell -1.4% MoM, more than the -0.1% forecast.
Eurozone PPI declined -0.6% MoM, more than the -0.5% forecast, but up from -2.2% in the previous month.
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