- Pound (GBP) is holding steady after losses last week
- BoE’s Mann warned over persistent inflation
- Euro (EUR) holds steady after German wholesale prices rose
- Eurozone GDP data is due tomorrow
The Pound Euro (GBP/EUR) exchange rate is holding steady after losses last week. The pair fell 0.35% in the previous week, settling on Friday at €1.1687 and trading in a range between €1.1594 and €1.1732. At 14:00 UTC, GBP/EUR trades -0.01% at €1.1686.
The pound is holding steady despite hawkish comments from Bank of England’s Catherine Mann.
Mann, an external member of the BoE Monetary Policy Committee, said today that goods and services prices could rise again, and wage pressures in the economy may remain elevated for years to come.
Catherine Mann voted against a rate cut in this month’s interest rate decision. She believes that upward pressures on wage growth and prices may well be structural, meaning that inflation could remain high over the next couple of years and will take longer to erode.
Her comments come ahead of tomorrow’s jobs data, which is expected to show that unemployment ticked higher to 4.5% in June, up from 4.4%. Average earnings are expected to cool considerably from 5.7% in the three months to May to 4.6%.
Later in the week, attention will be on UK inflation data, which is expected to tick higher in July after remaining at 2%, the Bank of England’s target level for the past two months.
The euro is holding steady as investors digest the latest German wholesale inflation data. The figures show that setting prices in wholesale trade rose 0.3% month on month in June after falling -0.3% in May. Economists had expected wholesale price inflation to increase 0.2%.
The data comes after German consumer price inflation ticked higher in July to 2.3% year on year, up from 2.2%.
The data comes as the ECB considers when to cut interest rates again after reducing them by 25 basis points in June.
Looking ahead across the week, investors will be watching out for tomorrow’s Q2 GDP figures and unemployment figures, which will provide further insight into the health of the eurozone economy.
