- Pound (GBP) is rising, adding to last week’s gain
- BoE’s Broadbent said that a rate cut depends on wage growth
- Euro (EUR) falls after losses last week
- German producer price data is due tomorrow
The Pound Euro (GBP/EUR) exchange rate is rising for a fifth straight day. The pair rose +0.43% in the previous week, settling on Friday at €1.1678 and trading in a range between €1.1606 and €1.1691. At 10:00 UTC, GBP/EUR trades 0.9% at €1.1688.
The pound is pushing higher for a sixth straight day against the euro amid a quiet economic calendar today and as investors look ahead to UK inflation data later this week. On Wednesday, UK inflation figures are expected to reveal that the consumer price index eased to 2.1% year on year in April, down from 3.2% in March.
The data comes after the UK jobs data last week showed that the unemployment rate rose to its highest level in two years.
Cooling inflation and a weakening jobs market could encourage the Bank of England to start cutting rates as soon as next month.
Bank of England deputy governor Ben Broadbent gave his last speech after 13 years at the central bank. He signaled that the decision to cut rates from a 16-year high would depend on the stickiness of wage grace and where the businesses pass on higher payroll costs through prices. His comments come after Bank of England governor Andrew Bailey hinted earlier this month that the first-rate cut could come as soon as June 20.
The euro continues to drift lower I made a lack of fresh fundamental catalysts. On the one hand, EUR is being pressurized by expectations that the European Central Bank will cut interest rates next month.
On the other hand, the euro has found some support, with losses limited by signs that the economy has started to recover after a downturn at the end of last year.
There is no high-impacting economic data due to be released today. Across the week, attention will be on German producer prices figures due tomorrow, and PMI data expected later in the week.
