- Pound (GBP) picks up from 7 week low
- UK GDP was weaker than forecast
- Euro (EUR) supported by weaker USD
- EZ Industrial production & ECB’s Lagarde to speak
The Pound Euro (GBP/EUR) exchange rate is pushing higher on Wednesday, pairing losses from the previous session . The pair settled -0.27% lower on Tuesday at €1.1503 after slipping to a low of €1.1478 earlier in the session a 7-week low. At 05:15 UTC, GBP/EUR trades +0.1% at €1.1515.
The Pound came under pressure following data which revealed that the UK economy grew at a weaker than expected rate in February. Britain’s economy expanded 0.4% month on month in February. Whilst this was a solid rebound from the -2.2% contraction experienced in January it was short of the 0.6% growth that analysts had penciled in.
Despite falling short of expectations, the economy managed to return to growth despite the tough lockdown restrictions which were imposed for the first three months of the year.
News that the US medical authorities have called for the Johnson and Johnson single shot covid vaccine to be paused could also have weighed on demand for the Pound. Concerns over rare blood clots have unnerved authorities. These are similar concerns to those surrounding the AstraZeneca vaccine in the UK. The UK has ordered 30 million doses of the Johnson & Johnson jab, so concerns could slow the UK vaccine rollout.
There is no high impacting UK data due to be released today, sop sentiment is likely to drive the Pound.
The Euro gained ground in the previous session as the weaker US Dollar helped the common currency to shrug off weak German sentiment data. ZEW economic sentiment data unexpectedly cooled in April, falling 5.9 points amid growing concerns over impact that tighter covid restrictions could have on the economy. Even so, as pointed by the ZEW Institute, the gauge still remains at a very high level.
Looking ahead, Eurozone industrial production data for February could attract some attention. European Central Bank President Christine Lagarde is also due to speak.