- Pound (GBP) picks up after two days of losses
- UK GDP Q2 to confirm 4.8% growth
- Euro (EUR) eases after strong economic sentiment boost
- German inflation data due
The Pound Euro (GBP/EUR) exchange rate is moving higher after two straight days of declines. The pair settled -0.1% on Wednesday at €1.1572 up from a fresh two month low of €1.1548. At 08:45 UTC, GBP/EUR trades +0.15% at €1.1589.
The Pound extended losses in the previous session weighed down by a combination of concerns including supply chain bottlenecks, labour shortages, and no petrol at the pumps. Empty petrol stations threatened to bring the country to a standstill, hurting demand for Sterling.
There has been little in the way of economic data for investors to sink their teeth into. However, today sees the release of UK GDP data, the final revision for the second quarter. Analysts expect a 4.8% quarter on quarter increase to be confirmed and annually a 22.2% increase. This comes after the UK economy recovered in the second quarter after it shrank -1.6% in the first three months of the year amid pandemic lockdowns.
The Euro gained ground in the previous session following data which revealed that economic sentiment within the bloc was better than expected. The data revealed that Eurozone consumer activity returned to pre-pandemic levels as consumer shrug off rising energy prices and on going supply chain disruptions.
Europeans are leaving their houses to go shopping, eat out, travel as much as they did before the pandemic in an encouraging sign. Economic sentiment rose to 117.8 in September, up from 117.6 and defying expectations of a decline to 116.9.
Looking ahead there is a slew of data from the Eurozone including unemployment and German inflation. German CPI for September is expected to rise to 4.2% up from 3.9%. This is well above the 2% target level and could prompt the ECB to adopt a more hawkish bias. On a monthly basis CPI is expected to rise 0.1%.
