- Pound (GBP) is rising, adding to last week’s gains
- BoE policymaker Megan Greene sees rates remaining unchanged
- Euro (EUR) falls amid the ongoing political situation in France
- Macron announced a new cabinet last night
The Pound-Euro (GBP/EUR) exchange rate is rising, adding to last week’s gains. The pair rose 0.25% in the previous week, settling on Friday at €1.1525. It traded between €1.1452 and €1.1555. At 11:00 UTC, GBP/EUR trades +0.25% at €1.1525.
The pound is pushing higher on Monday, boosted by hawkish Bank of England comments.
Bank of England policymaker Megan Greene signaled that she is considering keeping interest rates unchanged until at least March next year amid concerns that policy is not restrictive enough to cool inflation.
Speaking at a Society of Professional Economists’ conference in London, Greene said there was a case for skipping some rate cuts.
The central bank is expected to leave interest rates on hold in November, marking the first break in the quarterly rate-cutting cycle it initiated in August 2024.
The market is pricing in a 65% chance of a 25 basis point rate cut in February, which, given Green’s comment, suggests she may vote against it.
The UK economic calendar was quiet today. Attention will turn to tomorrow’s jobs data, which is expected to show the unemployment rate remains unchanged at 4.7%. Meanwhile, wage growth is expected to remain sticky at 4.7%. Bank of England governor Andrew Bailey is also due to speak tomorrow.
The EUR is falling amid ongoing political uncertainty in France. President Macron reappointed Sebastian Lecornu as Prime Minister on Friday, a week after his resignation.
Macron announced a new cabinet on Sunday as pressure builds for him and his Prime Minister to head off France’s growing political crisis and push a budget through the fragmented parliament.
The cabinet is due to meet for the first time on Tuesday which is when the PMI is expected to propose the Budget.
There was no EUR data today. Attention will turn to German ZEW economic sentiment and CPI data tomorrow.