- Pound (GBP) is lower after rising last week
- BoE Governor Bailey will speak tomorrow
- Euro (EUR) is rising despite weak German PPI
- German wholesale inflation fell -1.4% YoY.
The Pound Euro (GBP/EUR) exchange rate is falling on Friday after gains in the previous week. The pair rose 0.53% in the previous session, settling on Friday at €1.2007 and trading in a range between €1.1945 and €1.2054. At 14:00 UTC, GBP/EUR trades -0.02% at €1.2005.
The pound is edging lower after gains in the previous week as investors are cautious ahead of next week’s budget.
The Chancellor of the Exchequer will announce her plans for UK spending and tax revenue on October 30th. The Prime Minister has warned that this could be a painful budget for some as the chancellor looks to raise £40 billion in tax hikes and spending cuts.
The pound is modestly weaker after industry data today showed that job vacancies in the City of London fell by 17% year on year. The data points to a softening in the labour market.
This contrasts with national figures last week, which showed that unemployment fell unexpectedly to 4%.
Other data last week also showed that UK inflation cooled more than expected to 1.7% annually, and retail sales rose more than expected.
The UK economic calendar is relatively quiet this week. Bank of England governor Andrew Bailey will speak tomorrow and could provide more clues about the central bank’s plans for interest rates.
The Bank of England cut rates by 25 basis points in August and is expected to cut rates by a further 25 basis points in November.
The euro rose against the pound but fell against the US dollar at the start of the week after losing the previous week.
The euro is shrugging off data that showed German wholesale inflation cooled by more than expected in September.
German producer price index fell -1.4% year on year in September, down from -0.8% in August, and was weaker than forecasts of a full of -0.8%.
Data points to a weak demand environment and further cooling in the consumer price index.
The date comes after the ECB cut interest rates by 25 basis points last week and could cut rates again in December.
