Pound Under Pressure as ECB Hawkishness Looms
The Pound-Euro exchange rate has fallen to a two-month low due to UK bond market turmoil, which weighed heavily on Sterling. At the time of writing, GBP/EUR was trading at €1.1633, down 0.4% on the week.
A hawkish tone from the European Central Bank (ECB) could continue to put pressure on the Pound-Euro rate. Meanwhile, UK Chancellor John Healey's speech is expected to be a crucial catalyst for Sterling's movement, with a favourable response potentially giving GBP a lift and a disappointing one putting it under pressure.
Friday's GDP figures will also be an important release, as a slower-than-forecast British economy could weaken the Pound. The ECB's interest rate decision is another key event to watch, with a rate hike already largely priced in but a hawkish tone potentially lifting the single currency.