GBP/EUR: Will Eurozone GDP Data Pull Euro Lower?

The pound experienced a strong start to the previous week, which saw the pound US dollar reach a high of US$1.3213. However, sterling failed to maintain these levels. The pound US dollar exchange rate snapped a two-week winning spell to close lower across the previous week. The pound dropped 0.2% to finish Friday at US$1.3061. The pound is extending those losses in early trade on Monday.

Upbeat UK service sector activity data lifted the pound at the start of last week. The December pmi showed the service sector narrowly avoided contraction, boosting confidence in the UK economy. The UK Withdrawal Bill progressing through Parliament also helped buoy the mood towards sterling.

Mid last week the European Commission President Ursula von der Leyen reaffirmed the pessimistic view that an EU – UK trade deal will not be agreed in just one year. This weighed on demand for sterling.  Speculation over the future EU – UK relationship is expected to be a key driver of sterling this coming week.

In the second half of last week, Bank of England Governor Mark Carney dragged the pound lower. In one of his final speeches as Governor of the central bank, Mark Carney gave the biggest clue yet that the BoE could be cutting interest rates sooner rather than later. The pound fell on the prospect of loser monetary policy.

In the wake of Mark Carney’s comments, UK economic data could have the potential to swing the market more than usual. UK GDP and industrial production reports are due today, followed by inflation data on Tuesday and retail sales at the end of the week.

US – China Phase One Trade Deal Signing

Geopolitical tensions, China trade optimism and weaker than forecast non-farm payroll data drove the US dollar across the previous week. The dollar rebounded strongly mid-week from both the US and Iran indicating that they were not looking to elevate tensions further. However, the dollar slipped again on Friday after a disappointing US non-farm payroll report whereby both job creation and wage growth missed expectations.

This week the signing of the US – China phase one trade deal is expected to provide an optimistic backdrop to trading on Monday. With no escalation in geopolitical risks over the weekend, positivity from the US – China trade deal is expected to counter conflict risk in Persia.


What do these figures mean?
When measuring the value of a pair of currencies, one set equals 1 unit and the other shows the current equivalent. As the market moves, the amount will vary from minute to minute.

For example, it could be written:

1 GBP = 1.28934 USD

Here, £1 is equivalent to approximately $1.29. This specifically measures the pound’s worth against the dollar. If the US dollar amount increases in this pairing, it’s positive for the pound.

Or, if you were looking at it the other way around:

1 USD = 0.77786 GBP

In this example, $1 is equivalent to approximately £0.78. This measures the US dollar’s worth versus the British pound. If the sterling number gets larger, it’s good news for the dollar. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.