- Pound (GBP) falls for a second day
- UK manufacturing contracts for a 7th month
- Euro (EUR) rises modestly
- Eurozone CPI data is tomorrow
The Pound-Euro (GBP/EUR) exchange rate is falling on Thursday for a second straight session. The pair fell 0.1% in the previous session, settling on Wednesday at €1.1760. It traded between €1.1752 and €1.1792. At 21:30 GBP/EUR trades -0.06% at €1.1758.
The pound is falling on Thursday after UK manufacturing contracted for a seventh straight month. The manufacturing PMI fell to 45.4 in April, up from March is 44.9 and ahead of expectations of 44.
Delving deeper into the data British exports shrank at the sharpest pace in almost five years and cost pressures increased as the impacts of trump’s trade war and U.S. tax increases for employers started to show through the data comes as the Bank of England are expected to cut interest rates by 25 basis points to 4.25% next week and but has warned that it’s too early to say how tariffs will impact inflation.
The euro is edging higher for a second day with little in the way of economic data. News that the US and EU had made progress through multiple rounds of telephone negotiations since Trump imposed then paused 20% tariffs on the block. The tariffs are due to be imposed on the EU and multiple countries in early July, leaving the region racing to negotiate its way out of a full-blown transatlantic war.
EU negotiator Maros Stefcovic told the FT that Europe could be ready to make Trump a €$50 billion trade offer. He believes this could be solved quickly by purchasing agricultural products like soybeans or in other ways.
Looking ahead to tomorrow, attention will be on eurozone construction PMI data as well as inflation figures. Economists expect inflation to ease towards 2% from 2.2% in March. The ECB is widely expected to cut rates by 25 basis points in the June meeting.
