GBP/EUR up, GBP/USD down
Hold on a minute, yesterday morning GBP was falling against EUR and looked OK versus USD – so what has happened?
Yesterdays Eurozone data showed that inflation is lower than expected in the monetary union, this lessens the probability or necessity for an interest rate rise in the Eurozone – thus making EUR less attractive.
Furthermore Eurozone jobs data showed that unemployment is still on the rise. As such this adds pressure to calls for further stimulus from the ECB (Stimulus = increase monetary supply, increased supply = decrease price).
Versus USD, GBP has now fallen below the very significant 1.6000 mark, albeit only just. This seems to be a cautious retracement ahead of UK Manufacturing data this morning but more importantly a raft of US manufacturing data later this afternoon.