- Pound (GBP) set rises in quiet trade
- UK house prices fell for the first time in 11 years
- Euro (EUR) falls after weak German data
- ECB speakers in focus
The Pound Euro (GBP/EUR) exchange rate is rising for a second straight session. The pair rose +0.09% in the previous session, settling on Tuesday at €1.1617 and trading in a range between €1.1593 – €1.1635. At 08:35 UTC, GBP/EUR trades +0.2% at €1.1619.
The Euro is heading lower amid rising concerns over the health of the German economy after a string of weaker-than-expected data. German industrial production rose by less than expected in April, darkening the outlook for the eurozone’s largest economy.
German production increased by 0.3% month on month in April, falling short of the 0.6% increase expected. Industrial production had fallen by 3.4% in March.
The data comes after German factory orders unexpectedly fell by -0.4% Month on month in April after tumbling 10.9% in March. Meanwhile, the German manufacturing PMI released last week had dropped to 43.2, the fourth consecutive monthly decline and the lowest reading since 2020.
The data suggest that Germany, which fell into recession and the first three months of the year, could see the recession extended into the second quarter.
The data points to a less hawkish ECB. However, recent ECB officials have continued with the narrative that the central bank needs to raise interest rates further.
There is no more eurozone economic data due today; investors will look ahead to a speech from ECB officials Luis De Guindos and Fabio Panetta for further clues over monetary policy.
The pound is gaining despite a lack of fresh catalysts and despite signs of weakness in the UK economy. UK housing prices Annual basis in May for the first time in 11 years as prospective buyers suffer from high mortgage rates, which could deepen the downturn.
The average property price dropped 1% year on year, although prices were unchanged on a monthly basis.
There is no high impact in UK economic data due today. The rest of the week is also quiet as far as UK data is concerned.