- Pound (GBP) rises for a second day
- UK GDP data tomorrow
- Euro (EUR) falls with no fresh catalysts
- ECB rate decision next week
The Pound Euro (GBP/EUR) exchange rate is rising for a second straight day on Thursday. The pair rose 0.18% in the previous session, settling on Thursday at €1.1232 after trading in a range between €1.1202 – €1.1242. At 05:45 UTC, GBP/EUR trades +0.35% at €1.1271.
The pound traded within a narrow range on Wednesday as it lacks meaningful and impactful economic or fundamental data for investors to digest.
Data from the recruitment and employment confederation and KPMG released today hinted towards any signs that the UK is labour market could be cooling. The report found that permanent job placements had declined for a fifth straight month while wage growth also slowed.
Consider the report comes ahead of the UK labour market report, which is due to be released early next week. These reports have been showing that the UK jobs market remains tight and wage growth strong.
The upside in the pound is being camped by comments from Bank of England policymaker Swati Dhingra, she believes that interest rate hikes should now be paused. As a known dove within the MPC Dhingra has warned about the possibility of overtightening.
Looking ahead, Investors will be focusing on Friday’s GDP data released, which is expected to show that the economy grew 0.1% month on month in January after contracting by 0.5% in December. Stronger-than-expected UK economic growth could boost the pound.
The euro on Thursday amid a quiet day for economic data and with little in the way of fresh catalysts for the common currency. Data earlier in the week has painted a mixed picture, with German retail sales unexpectedly fooling whilst industrial production jumped at a faster pace than expected.
European Central Bank speakers this week have sounded hawkish this week as investors Looking ahead in the ECB interest rate decision next week, where the central bank is broadly expected to hike rates by 50 basis points.
The market will be keen to see what the ECB plans after this March hike. President Christine Lagarde and other policymakers have hinted that more rate hikes could be on the cards.
