- Pound (GBP) rises but remains near an 8-month low
- The market mood improves on deal hopes
- Euro (EUR) falls but rises against the USD
- The EU is negotiating with Washington
The Pound-Euro (GBP/EUR) exchange rate is rising after two days of losses. The pair fell 0.83% in the previous session, settling on Monday at €1.1666. It traded between €1.1637 and €1.1796. At 12:00 UTC, GBP/EUR is trading 0.08% at €1.1674.
The pound is inching higher, boosted by an improved market mood as global equities rebounded on Tuesday after a chaotic session on Monday.
Global equities experienced heightened volatility yesterday as investors reacted to rumors, denials, and developments surrounding U.S. trade tariffs. Today, stocks in Asia rebounded, and European markets are rising, although the games could prove to be short-lived.
Still, improvements made, at least for today, are helping the pound, which is perceived to be a riskier currency, rise, recovering some of its losses against the euro, but it still trades around an 8-month low.
The pound is struggling to recover as investors consider whether the Bank of England will adopt a more aggressive stance on rate cuts. Attention will be on BoE Governor Andrew Bailey when he speaks this week.
The EUR is inching lower against the pound and rising against the USD but struggles to make significant headway. The market is hopeful that Trump could be open to doing deals on tariffs. EU trade commissioner Maros Sefcovic said that the EU has offered zero-for-zero tariffs to the US on cars and all industrial goods. The EU prefers to talk rather than apply retaliatory tariffs.
The eurozone economic calendar is quiet today, with no high-impact data releases to influence your action. As a result, market participants will continue to assess fresh developments on the global trade conflict.
Meanwhile, the ECB increased its monitoring of banks and the bond market. I made the trade or driven round in global stocks but has so far found no reason for alarm. Stocks in Europe have also fallen sharply since President Trump unveiled tariffs stoking recession fears in the world’s largest economy.
