- Pound (GBP) supported by upbeat GDP
- BoE’s Andrew Bailey due to speak later
- Euro (EUR) supported by European Commission’s upward revision to GDP
- No Eurozone data is due.
The Pound Euro (GBP/EUR) exchange rate is edging a few pips higher on Thursday. The pair ended the session on Wednesday at roughly the same level that it started the session at €1.1640, despite trading as high as €1.1680 earlier in the day. At 05:45 UTC, GBP/EUR trades +0.04% at €1.1644.
The Pound jumped higher following better than expected UK GDP data. The UK economy contracted by a less than expected -1.5% quarter on quarter in the three months at the start of the year. This was better than the -1.7% contraction that analysts expected.
Furthermore, the month on month GDP reading for March revealed that the UK economy grew at 2.1%, stronger than the 1.3% forecast. This was also up firmly from February’s 0.4% growth. Momentum appeared to be building in the economy as businesses prepared for the easing of lockdown measures. With the reopening in full swing, the expectation is that the growth will continue ramping up over the coming months.
There is no high impacting UK data due to be released today. Instead, investors will look ahead to a speech by Bank of England Governor Andrew Bailey. However, given that he also spoke yesterday new information could be limited.
The Euro held steady versus the Pound in the previous session showing resilience despite a stronger US Dollar, after the European Commission raised its growth forecasts for the bloc. The EC now expects the Eurozone economy to expand by 4.3% this year, up significantly from 3.8% growth previously forecast.
After a weak start to the year and a third wave of covid, the Eurozone vaccine program has ramped up improving the outlook for the region. Unprecedented fiscal and monetary stimulus has supported workers and businesses, according to the commission.
In the absence of any high impacting Eurozone data, investors will keep an eye on covid developments and the mood in the market to drive movement in the Euro.