- Pound (GBP) falls after gains last week
- The BoE hawk-turned-dove Catherine Mann to speak this week
- Euro (EUR) rises despite trade tariff worries
- Trump applies 25% tariffs on steel & aluminum imports
The Pound Euro (GBP/EUR) exchange rate is falling on Monday after gains last week. The pair rose 0.41% in the previous week, settling on Friday at €1.2015. It traded in a range between €1.1933 and €1.2069. At 12:30 UTC GBP/EUR is falling -0.08% at €1.2007.
The pound is edging lower at the start of the week as investors wait for a key speech from Andrew Bailey, the Bank of England governor, and Catherine Mann, the Bank of England policymaker who turned dovish in the latest meeting.
Catherine Mann had been a known hawk but voted to cut interest rates by 50 basis points in the meeting last week. The market will be keen to see what she now considers to have changed to warrant voting in favour of such a large rate cut.
Last week, the BoE cut rates by 25 basis points but also lowered the UK’s growth forecast to just 0.75% and lifted the inflation outlook to 3.8% in Q3.
The EUR is edging modestly high against the pound but remains depressed versus the US dollar amid rising global trade tensions. President Trump announced 25% tariffs on all steel and aluminium imports into the US, escalating trade tensions.
The euro is under pressure from worries that Trump will follow through with his threats of trade tariffs on the European Union. Such measures could slow already-stalled growth in the region.
Attention will also be on ECB president Christine Lagarde’s speech, which could provide further clues regarding the outlook for interest rates. The central bank cut interest rates by 25 basis points in January and is expected to continue cutting rates as inflation remains close to the 2% target and growth stagnates.
Meanwhile, Sentix investor sentiment will be a focus in an otherwise quiet day on the economic calendar.
