- Pound (GBP) rises after losses last week
- U.K. house prices fall 1.9% in December
- Euro (EUR) eases ahead of ECB speaker
- ECB rate decision is due this week
The Pound Euro (GBP/EUR) exchange rate is rising, after losses last week. The pair fell -0.2% in the previous week, settling on Friday at €1.1654 and trading in a range between €1.1641 – €1.1695. At 09:00 UTC, GBP/EUR trades +0.1% at €1.1664.
The pound drifted lower last week amid a lack of fresh data to drive sterling. However, that should change this week, which is expected to be busy with the release of economic data and the Bank of England interest rate decision.
Today, investors are digesting the latest UK property data from Rightmove, which showed that the average asking price of newly listed homes in the UK fell by 1.9% in December, more than the historic average decline for the final month of the year.
However, this data contrasts with mortgage data from Halifax and nationwide in the past two weeks, revealing modest monthly price increases.
While housing data doesn’t directly affect the pound’s value, it sheds light on the possible health of the consumer, where falling house prices often drag consumer sentiment lower.
Looking ahead tomorrow sees the release of UK jobs data and this comes ahead of Thursday’s Bank of England interest rate decision.
The euro is under pressure at the start of the week giving back some of last week’s gains. No eurozone economic data is due today; however, ECB policymaker Elizabeth McCaul is expected to speak, and comments will be watched for clues over the outlook for inflation or the economy.
Recent ECB speakers have highlighted the significant cooling in inflation as a reason that the ECB may have finished hiking interest rates. The focus at this week’s meeting will be for any clears over when the central bank may start to cut rates. Currently, the market is pricing in expectations that the ECB could begin to cut rates as soon as March next year.
