The British pound (GBP) is flat against the Euro (EUR) on Friday.
- UK April GDP falls over 20% from March
- EU sets dates for July-Sept round of post-Brexit negotiations
- Stock markets rebound from steep Thursday sell-off
- Pound-Euro exchange rate (GBP/EUR) lower by -0.87% this week
GBP/EUR was unchanged at (+0.00%) to 1.1149 as of 3pm GMT.
The currency pair bounced back from yesterday’s plunge below 1.11 to trade in a range around 1.115 for most of the day.
GBP: Worst ever UK monthly economic contraction
April was one for the record books in terms of monthly economic contractions. The value of UK gross domestic product (GDP) cratered -20.4% according to the Office for National Statisitcs- worse than the already horrific -18.7% projected. That is by far the worst drop ever recorded- and the Bank of England has been recording such statistics for longer than most global institutions. Every sector of the UK economy contracted in April. In March UK GDP fell -5.8% as lockdowns started towards the end of the month.
Released at the same time, industrial production was just as bad – if not worse. Manufacturing production fell -28.5% versus the same time last year – much worse than the -28.5% y/y expected.
Still, as bad as the data was – the pound held up, as riskier assets globally retraced some of the steep losses from yesterday.
EUR: Dollar haven status weighs on the euro
Potentially helping the pound to the detriment of the euro was the announcement from the European Commission of a series of new dates for post-Brexit negations between July and September. It suggests the EU have now moved on from the idea of an extension to the transition period and are looking forward regardless.
As the US dollar has strengthened since the Fed meeting as a haven in FX markets, the euro has been one of the hardest hit. The euro versus the dollar (EUR/USD) fell to its lowest in eight days.
The Eurozone had its own weak industrial data – with EZ April industrial production falling -17.1% – better than the -18.5% expected but clearly still very bad.
