The euro has edged higher against the dollar this morning, but it remains under heavier pressure than the pound thanks to the eurozone’s acute dependence on energy imports. The old rule of thumb still holds – when oil surges, Europe pays a disproportionate price.
That’s a headache for the European Central Bank, which was already grappling with an unexpected rise in consumer price inflation to 1.9% last month, with sticky services prices the main culprit. The Iran conflict has effectively shelved any prospect of near-term rate cuts, and some analysts now say a rate hike is no longer unthinkable. Eurozone retail sales data are due today, but the real event is the ECB’s meeting on 18–19 March, which will include updated economic projections.
GBP/EUR: the past year
