- Pound (GBP) steadies below €1.20
- UK economic growth expected at 0.4% MoM in November
- Euro (EUR) rises on a weak USD
- Eurozone balance of trade, German GDP 2021 due
The Pound Euro (GBP/EUR) exchange rate is holding steady on Friday after mild losses in the previous session. The pair settled -0.07% lower on Thursday at €1.1962. At 05:45 UTC, GBP/EUR trades +0.02% at €1.1965. The pair is on track to gain 0.1% across the week, marking its sixth straight week of gains.
The Pound drifted a few pips lower in the previous session amid a lack of catalysts. There was no high impacting data and the political storm in Downing Street appears to have died down. Senior Conservative ministers are backing Boris Johnson to remain in Power.
After a quiet week as far as economic data is concerned, things get a little more interesting today with the release of UK GDP, manufacturing and industrial production data. Analysts are expecting the UK economy to grow 0.4% month on month in November an improvement from the 0.1% growth recorded in October.
According to analysts at Barclays, there is a high probability that the UK grew at a faster pace of around 0.7%, thanks to a rapid pace of expansion in construction. However, they also acknowledge that there were downside risks such as a lack of momentum. Omicron cases started rising sharply in December so the impact on November data would be limited. A strong print could boost the pound.
Separately manufacturing and industrial production data will also be released. Manufacturing is expected to decline -0.3% year on year, after expanding 1.3% in October. Meanwhile industrial production is expected to grow 0.5% annually from 1.4%.
The Euro drifted higher on Thursday in the absence of any significant data. As was the case for the pound, euro data has been thin on the ground this week.
Today, things pick up with the release of French inflation data, German full year GDP and the Eurozone balance of trade.
The German GDP for 2021 is expected to show growth of 2.7%, after contracting 4.6% in 2020 due to the pandemic. A stronger read could boost the Euro.