Pound Euro (GBP/EUR) Exchange Rate Rangebound Despite Forecast Beating UK GDP
The Pound Euro (GBP/EUR) exchange rate traded mostly flat on Thursday following the publication of the UK’s latest GDP reading.
At the time of writing, GBP/EUR traded at around €1.1989, virtually unchanged from Thursday’s opening rate.
Although muted against the Euro (EUR), the Pound (GBP) managed to tick up against the majority of its peers on Thursday following the publication of the UK’s latest GDP reading.
The preliminary estimate for the final quarter of last year reported a surprise uptick in growth, with the index printing at 0.1% rather than an expected 0% reading.
The data served to reverse some of this weeks pessimism surrounding the overall health of the UK economy, while also reducing current Bank of England (BoE) interest rate cut bets.
Following the release, money markets extended their expectation for a rate cut from the BoE from May until June.
The Euro managed to hold steady and even firmed against several of its counterparts on Thursday, despite the publication of some downbeat domestic data.
The Bloc released its latest industrial production data which showed a larger-than-expected downturn in December’s reading.
The index dropped from a previous reading of 0.4% to -1.1%, falling further than a more modest -0.6% expectation.
Looking ahead, the primary driver of movement for the Pound Euro exchange rate looking ahead to Friday will likely be the publication of several data release from within the Eurozone.
The Bloc is expected to release both its latest employment change survey and its latest GDP reading.
As both indices are expected to decline, this could see the single currency close the week on the back foot.
Turning to the Pound, UK data will be absent from Friday’s data-calendar, and as such, we will likely see Sterling trading without a clear direction.
Adam Solomon
Contributing Analyst
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