- Pound (GBP) rises after gains last week
- Brexit deal could be agreed today
- Euro (EUR) falls after losses last week
- Eurozone inflation & ECB minutes are due this week
The Pound Euro (GBP/EUR) exchange rate is rising, extending gains from last week. The pair rose 0.59% across the previous week, settling on Friday at €1.1318, after trading in a range between €1.1244 – €1.1387. At 05:45 UTC, GBP/EUR trades +0.05% at €1.1324.
The pound is starting the week on the front foot as attention is firmly on Prime Minister Rishi Sunak and the new terms of the Brexit deal. Rishi Sunak is due to meet with European Commission President Ursula von der Leyen to thrash out the final details and announce a new Brexit deal for Northern Ireland.
This new deal looks to resolve tensions caused by the 2020 post-Brexit agreements surrounding the open border with EU member Ireland. What is unclear at the moment is whether it will be enough to put an end to the political gridlock in Northern Ireland and quieten critics in the UK.
Today there is no high impacting UK data. Instead, investors will be watching a speech from Bank of from the Bank of England’s Ben Broadbent for clues over the direction of future interest rate hikes. His comments come as data in recent weeks has been mixed, with inflation cooling more than expected but wage growth and beating forecasts.
The euro is heading lower extending losses from last week despite a series if stronger than forecast data, including IFO business climate, PMI data, and core inflation proving to be stickier than initially feared and ticking higher to 5.3% year on year in January, up from 5.2% in December.
While the economic calendar is quiet for the eurozone today, things are likely to ramp up across the week with the release of Eurozone inflation data for February, the preliminary reading, and the release o the minutes from the February European Central Bank meeting. The minutes come as the market expects the central bank to raise interest rates again by 50 basis points this month.
