The pound euro (GBP/EUR) exchange rate is falling on Tuesday, giving back yesterday’s gains.
The euro is rising despite weak German export data as US demand slows. Data showed German exports fell by 1.4% in May compared to April, which was worse than the -0.2% forecast.
Exports to the US dropped 7.7% in May following a 10.5% drop in April, this was a reversal of frontloading seen in February and March.
The pound is falling amid ongoing concerns over the government’s fiscal position following a U-turn on welfare spending last week.
The government may need to hike taxes in October, which could slow growth and have a deflationary impact.