The ECB will still be concerns over the threat of sticky core inflation.īerenberg commented “While inflation is definitely moving in the right direction, it is still much higher than would be consistent with the ECB’s inflation target.” Unless eurozone CPI today surprises on the upside to drag eurozone swap rates higher, EUR/GBP looks as though it can drift to the 0.8550 area.”Ī Euro to Pound exchange rate of £0.8550 equates to €1.1700 for Pound to Euro exchange rate. And sterling now looks like a decent intra-European target currency for the carry trade. ING added “This leaves the market pricing close to 100bp of tightening this year and has sent EUR/GBP below 0.8600. The data maintained expectations that inflation pressures in the Euro area were easing. The core inflation rate also declined to 5.3% from 5.6% and below expectations of 5.5%. The headline Euro-Zone inflation rate dipped sharply to 6.1% for May from 7.0% and below consensus forecasts of 6.3%. The HICP rate also declined to 6.3% from 6.8% previously. The German data recorded a decline in inflation to 6.1% for May from 7.2% previously. Given a data-dependent Bank of England, we now expect two more 25bp rate rises (in August and September) on top of the one we already expected in June.' HSBC commented 'The UK's April inflation print was a shocker.

Overall yield expectations have continued to underpin the UK currency in global markets. ING noted “True to form, however, Mann warned that UK consumers were using excess pandemic-level savings to fund spending - and that corporates were taking advantage of better pricing power to improve margins.Īll major economists expect that the BoE will increase rates at the June policy meeting and a majority expect that rates will be increased to at least 5.00%. In comments on Wednesday, Bank of England MPC committee member Mann stated that the UK had a bigger inflation problem than the US and Euro-Zone with businesses looking to increase prices in order to protect and strengthen margins. GBP/USD was unable to hold the gains and drifted towards 1.2400 on Thursday before settling around $1.2430. The Pound to Dollar (GBP/USD) exchange rate again found support close to $1.2350 against the dollar on Wednesday and jumped to highs at 1.2450 amid a tentative dollar correction and month-end position adjustment. The Pound Euro (GBP/EUR) exchange rate posted fresh six-month highs at €1.1650 before a marginal correction on Thursday's session on FX markets.

Todays dollar to euro exchange rate