The pound euro (GBP/EUR) exchange rate is rising, reversing last week’s losses.
The pound is rising as risk sentiment improves after President Trump said the US would delay strikes on Iranian energy infrastructure, easing geopolitical tensions.
UK gilt yields have fallen after earlier spikes, as markets scale back aggressive expectations of Bank of England rate hikes to around 60 basis points, though this remains a shift from prior rate-cut expectations.
Sterling is strengthening against the euro on expectations that the BoE will tighten more than the ECB.
Meanwhile, oil prices have dropped, easing inflation concerns. The euro is rising versus the dollar but weakening against the pound amid diverging policy expectations.
Attention turns to Eurozone PMI data tomorrow.
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