- Pound (GBP) rises despite dismal GDP data
- UK GDP stalls in March
- Euro (EUR) falls on recession fears, Russia tensions
- Eurozone industrial production data is due
The Pound Euro (GBP/EUR) exchange rate is rising on Friday, adding to gains in the previous session. The pair settled 0.87% higher yesterday, at €1.1750, after trading in a range between €1.1601 – €1.1779. At 05:45 UTC, GBP/EUR trades +0.03% at €1.1755. The pair is set to gain 0.5% across the week after losing 1.9% the previous week.
The pound managed to gain versus the euro yesterday, but that was more of a euro weakness story than owing to a solid pound. UK GDP data disappointed, showing that the UK economy grew 0.8% quarter on quarter in the first three months of the year, down from 1.3% in Q4 of last year and below the 1% forecast.
Delving deeper into the data, the quarterly growth was down to a strong January, with growth stalling in February and the economy contracted -0.1% in March.
The pound is also being hampered by Brecoit concerns which are back after the British government threatened o scrap the Northern Ireland portico, risking a trade war with Europe.
Today there is no high impacting UK data so attention could be more focused on the euro.
The Euro fell yesterday and was the worst-performing central currency pair in the G10 space. Concerns over the recession and an escalation of tension with Russia as Finland applies to NATO hit the common currency.
Today’s attention will be on eurozone industrial production, which is expected to fall 2% month on month in March after rising 0.7% in February.
After hints from Christine Lagarde last week, the vice president of the European Central Bank, Luis De Guindos, is also due to speak and could shed some light on the prospects of a July rate hike.
