- Pound (GBP) is rising for a second day
- BoE Bailey speaks before the Treasury Select Committee
- Euro (EUR) is falling amid continued trade tariff questions with the US
- German GDP data is due tomorrow
The Pound-Euro (GBP/EUR) exchange rate is rising modestly on Tuesday, extending gains for a second day. The pair rose 0.03% yesterday, settling on Monday at €1.1458. It traded between €1.1424 and €1.1458. At 15:30 UTC on Tuesday, GBP/EUR trades 0.16% higher at €1.1469.
The pound is rising modestly again against the euro but is struggling at a one-month low against the US dollar ahead of testimony from Bank of England governor Andrew Bailey Later today.
Bailey’s testimony before the Treasury Select Committee could offer further insight into his decision to keep interest rates unchanged at the Bank of England’s decision earlier this month.
The Bank of England saw a narrow vote split of five to four; however, markets expect the central bank to cut rates by a further 25 basis points at the March meeting.
This comes after UK unemployment rose to 5.2%, wage growth slowed, and inflation cooled to 3% year on year.
Also in focus will be the election in Manchester Gorton and Denton by-election on Thursday, seen as an important test for Prime Minister Kier Starmer and his Labour Party.
The euro is under pressure amid a quiet economic calendar and lingering uncertainty surrounding US tariffs.
The European Parliament decided to postpone a vote on Monday, originally scheduled for today, on the EU-US trade deal after Trump announced a blanket 15% tariff in response to the US Supreme Court’s ruling against existing tariffs.
Attention will also turn to German GDP data tomorrow, as well as German CPI figures later in the week, although these are unlikely to impact the ECB’s outlook, which is not expected to cut interest rates this year.
