![]() ![]() If the PMI surveys print true to expectations, GBP could stumble.Pound Euro (GBP/EUR) Exchange Rate Rises following Unexpected Rise in UK CPI ![]() ![]() Currently, forecasters are predicting a notable decline in the UK’s vital services sector, while the Eurozone scores are expected to fare better. Could more strong data boost Sterling?īoth the Eurozone and the UK flash PMIs for March are then to be published. January’s figures showed an unexpected rebound in sales. More high-impact data is due on Friday, including the UK’s latest retail sales report for February. The Pound could plunge if the BoE leaves rates unchanged. The BoE is widely expected to raise interest rates by 25bps, but there is the possibility of a rate hike pause – particularly if inflation misses forecasts and turmoil continues in the global banking sector. The key event for GBP/EUR comes midweek as the Bank of England meets to set monetary policy. If the CPI eases more than expected, Sterling could slump. Economists expect another modest slowdown in headline and core inflation. Morale is forecast to drop for the first time since September. The coming week brings multiple higher-tier calendar events, so we could see big swings in the Pound Euro exchange rate.Īn expected decline in German economic sentiment on Tuesday could create headwinds for the Euro early on. GBP/EUR Exchange Rate Forecast: BoE Interest Rate Decision in the Spotlight The Eurozone’s final CPI printed as expected, prompting very little movement in the Euro. On Friday, the single currency failed to recoup any significant losses. However, ECB President Christine Lagarde did not commit to future hikes, and said that decisions would be data-dependent and that they would monitor the financial situation closely. Fears of contagion effects and fragility in the European banking sector spooked EUR investors, while markets also began betting on the possibility of a dovish pivot from the ECB.ĭespite concerns of financial instability, the ECB went ahead with a 50bps interest rate rise on Thursday. Wednesday then saw EUR exchange rates plunge as shares in European bank Credit Suisse cratered by 30%. The Euro’s negative correlation with a weakening US Dollar (USD) helped lift EUR. The safer common currency firmed against Sterling on Tuesday, despite a risk-on mood. Meanwhile, the Euro was vulnerable to losses at the start of last week as investors were reluctant to place any aggressive bets ahead of the ECB decision on Thursday. Euro (EUR) Exchange Rates Slump amid Credit Suisse Selloff Market expectations that the Bank of England could pause its rate hiking cycle prevented any further upside. However, it later rebounded against the weakening Euro.Īt the end of the week, Sterling trimmed its gains somewhat but remained up on the week. The Pound stumbled initially on Thursday as worries of more industrial action across the UK troubled GBP investors. Chancellor Jeremy Hunt revealed some new policies to promote growth in the UK economy, while the Office for Budget Responsibility (OBR) gave a more upbeat forecast. While this was mainly due to EUR weakness, the Spring Budget may have aided the upside. Midweek, the Pound rocketed higher against the Euro. The rise in UK average earnings, including bonuses, eased from 6% to 5.7% year on year in the three months to January. Slowing wage growth dampened Bank of England (BoE) interest rate rise bets on Tuesday, trimming GBP’s gains. The Pound (GBP) managed to fluctuate higher against the Euro on Monday as hopes of growth-boosting measures from the Chancellor’s upcoming Budget helped Sterling find modest gains. Pound (GBP) Exchange Rates Firm following UK Budget The Pound Euro (GBP/EUR) exchange rate strengthened last week after the selloff in the European banking sector hammered the Euro (EUR) and led to some dovish forward guidance from the European Central Bank (ECB).Īt the time of writing, GBP/EUR was trading at €1.1412, up 0.7% on the week. ![]()
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