- Pound (GBP) treads water after two days of losses
- UK house prices fall sharply
- Euro (EUR) steadies ahead of GDP data
- German industrial production beats estimates
The Pound Euro (GBP/EUR) exchange rate is holding steady on Wednesday after two days of losses. The pair fell 0.2% yesterday, settling at €1.1591 after trading in a range between €1.1580 – €1.1663. At 09:25 UTC, GBP/EUR trades flat at 0.03% at €1.1663.
The pound is holding steady on another data quiet day. High-impacting UK data has been in short supply this week. Attention is on the housing market after Halifax revealed that house prices fell last month by the most since the financial crisis.
House prices fell 2.3% month on month in November after a 0.4% decline in October. With household income squeezed by soaring inflation and rising borrowing costs, demand has slumped. According to a poll carried out by Reuters, economists expect house prices to drop around 5% in 2023 after rising 24% over the past two years.
The euro it’s holding steady despite stronger-than-expected German industrial production. Output fell by nought .1% in October after a 1.1% fall in September. Expectations had been for a nought .5% drop. On a yearly basis, German industrial production excluding energy fell nought .4%.
Data comes following German factory orders, which also surprised to the upside. German factory orders rose 0.8% month on month in October after tumbling 4% in September. Data suggests that the expected German recession could be milder than initially feared.
Attention now turns to eurozone Q3 GDP data which is due to confirm the previous reading of 0.2%. this is down from 0.8% in the second quarter. The eurozone economy is expected to contract in the current quarter and tip into recession, marked by two consecutive quarters of contraction, in Q1 2023.
ECB speakers will also be in focus, with Fabio Panetta and Chief economist Philip Lane due to speak. Investors will be watching for any signs of where the ECB may take future interest rates. The ECB will meet next week to announce its management policy decision.