GBP-EUR continues decline

Monday was a relatively quiet start to the week with no key economic data to drive exchange rates. Instead it was more of the same from last week with the Euro trading as the strongest currency, and the pound as the weakest which saw GBP/EUR continue its drop from 1.40 with losses of over 1% through the day. This correction is expected to continue in the coming weeks and could last even longer and go even lower depending on how close the election votes are in the weeks to come.

There were a few small announcements to mention, US Home Sales figures were worse than expected whilst still improving from last month, and Euro-zone Consumer Confidence was improved from -6.7 in February to -3.7 in March.

Mario Draghi gave a speech in Brussels where he was upbeat about the Euro-zone recovery gaining momentum and strengthening, and cited the fall in oil prices and the depreciated Euro as main reasons for this. Whilst the Greece situation is still ongoing, the worst for the Euro-zone seems to be behind which could support a slightly stronger Euro on the coming weeks and month.

Today is a busier day kicking off with Euro-zone PMI data at 9:00am and then UK Inflation figures at 9:30am. Inflation is expected to drop further and could add extra pressure on the struggling pound. The afternoon also sees inflation data for the US at 12:30pm and no change is expected from last month.