The pound euro (GBP/EUR) exchange rate is falling towards €1.21 after gains last week.
The euro is rising as European leaders, along with UK PM Kier Starmer, plan to present a peace deal for Ukraine to the US, raising hopes of ending the 3-year war. Leaders also pledged to increase defence spending.
Eurozone inflation eased to 2.4% YoY from 2.5%, but was less than the 2.3% forecast. The ECB is expected to cut rates on Thursday.
The pound is falling against the stronger euro despite the UK manufacturing PMI contracting for a fifth straight month, though it was revised higher to 46.9.
Factories also cut staff at the fastest pace since the pandemic ahead of April’s hike on employers’ national insurance.