- Pound (GBP) rises in quiet trade
- BoE rate decision is next week
- Euro (EUR) falls after gains yesterday in choppy trade
- ECB’s Lagarde is due to speak
The Pound Euro (GBP/EUR) exchange rate is falling on Thursday, paring gains from the previous session. The pair rose 0.16% yesterday, settling at €1.1610 after trading in a range between €1.1566 – €1.1632. At 09:25 UTC, GBP/EUR trades down -0.18% at €1.1590.
The euro fell yesterday despite an upward revision to eurozone GDP data. Eurozone economy great 0.3% in the third quarter, revised higher from 0.2% this was down from 0.8% growth in the April-June period.
Even say the eurozone economy is expected to tip into a recession, which is two-quarters of negative growth early next year.
Today investors are looking to a speech by European Central Bank president Christine Lagarde. They will be watching closely for any clues regarding the economic outlook for the eurozone and for any comments on the future path of interest rates.
Her speech comes ahead of the ECB interest rate decision next week, where the central bank is widely expected to raise interest rates by 50 basis points. This comes after the ECB raised interest rates by 75 basis points at the last two meetings.
The pound has traded quietly Eva the past week, lacking direction as fundamental drivers have been few and far between.
Given the quiet UK economic calendar, investors are naturally looking ahead to the Bank of England interest rate decision next week. The central bank is widely expected who lift interest rates by another 50 basis points to take borrowing costs to 3.5% even though the UK economy is tipping into recession.
Inflation remains very high in the UK at 11.1% amid a cost-of-living crisis. The country faces a winter of discontent from workers such as rail staff, nurses, teachers and postal staff who are preparing to take strike action to demand higher pay.
