ExchangeRates.org.uk - The Pound Euro (GBP/EUR) exchange rate fell on Monday, after Donald Trump’s nomination for Treasury Secretary helped ease fears of US tariffs damaging the Eurozone economy.The Pound (GBP) slipped against the Euro (EUR) on Monday, although it managed to gain ground elsewhere following some hawkish comments from Bank of England (BoE) Deputy Governor Clare Lombardelli.
The rate-setter told a conference at the Bank that the fight against inflation was not over.
Lombardelli said:‘It’s too early to declare victory on inflation.
It’s often been said that the last mile may be the hardest, and that’s where we are now.’
These comments boosted the Pound on Monday, with GBP rising against many of its rivals.
However, GBP/EUR slipped.
Meanwhile, the Euro gained ground thanks to its negative correlation with a weakening US Dollar (USD).
USD exchange rates fell as markets cheered Donald Trump’s choice for Treasury Secretary.
The President-Elect nominated Scott Bessent to lead the Treasury.
Bessent has called Trump’s proposed tariffs ‘maximalist’ and argued that any such polices must be ‘layered in gradually’.
Investors took his nomination as a sign that the Trump administration may take a softer approach to trade taxes than many had feared.
This weakened the US Dollar, thereby boosting the Euro, while also alleviating fears that a US-EU trade war would hammer the Eurozone economy.
GBP/EUR Exchange Rate Forecast: Both Currencies to Face Headwinds?
Looking forward, the Confederation of British Industry’s (CBI) distributive trades survey could influence the Pound on Tuesday, amid a lack of more impactful data.
Markets expect retail sales volumes to have contracted again this month, adding to a growing body of evidence that the UK economy has slowed significantly in the second half of 2024.
If so, Sterling could struggle.
As for the Euro, Germany’s latest consumer confidence report could affect the single currency on Wednesday.
If German consumers remain deeply pessimistic heading into December, amid political turmoil and fears of a winter recession, EUR exchange rates could stumble.
This content was originally published on ExchangeRates.org.uk