Yesterday the GBPEUR rate fell to 1.1577 which is the lowest we have seen for a couple of weeks. The Single currency strengthened after the European Central Bank raised its growth and inflation projections. The ECB also pledged a steady flow of stimulus over the summer, fearing that a retreat now would accelerate a concerning rise in borrowing costs and choke off the recovery.
ECB President Christine Lagarde said “We believe that the steady hand is actually the right response,” stressing that tapering, exiting or transitioning away from the 1.85 trillion euro Pandemic Emergency Purchase Programme had not even been discussed.
The Dollar weakened yesterday pushing GBPUSD rate up to 1.4166 after US inflation was reported to rise to 5% for Mays year on year figure, the highest since 2008. The jump, bigger than expected, will fuel concerns that inflationary pressures are building in America as the economy rebounds strongly from the pandemic.
Have a great day.
Author: William Jones, senior relationship manager
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