The pound-euro (GBP/EUR) exchange rate is falling, snapping a two-day winning streak.
The pound is falling after UK CPI eased to 3.6% in October, its first decline in five months, reinforcing expectations of a 25 bp BoE rate cut in December. Services inflation also cooled to 4.5%, below forecasts. Caution persists ahead of the Chancellor’s Budget.
The euro rose as eurozone inflation held at 2.1% YoY in October, with services inflation ticking up to 3.4%. Country-level data showed wide variation, from 0.2% in Cyprus to 8.4% in Romania.
With inflation near target, the ECB is seen as finished tightening, with PMI data next in focus.