- Pound (GBP) is rising after gains last week
- UK GDP data is due on Thursday
- Euro (EUR) fell last week
- German industrial production data is due
The Pound Euro (GBP/EUR) exchange rate is rising, adding to gains from last week. The pair rose +0.19% in the previous week, settling on Friday at €1.1557 and trading in a range between €1.1503 – €1.1576. At 10:35 UTC, GBP/EUR trades +0.02% at €1.1561.
The pound is holding steady after gaining versus the euro in the previous week. Data last week showed that the UK services PMI contracted by less than initially expected in September at 49.2, better than the 47.2 from the preliminary reading.
The data comes ahead of UK GDP figures later this week, which are expected to show that the UK economy grew 0.5% month on month in August after posting 0% growth in July.
Meanwhile, concerns remain over the health of the UK housing market after house prices fell by the most since 2009 in the 12 months to September. According to Halifax data released on Friday, house prices were 4.7% lower than in September 2022.
This week is a relatively quiet start to the week for UK economic data instead, attention will be on the Labour party conference, which is taking place in Liverpool.
Meanwhile, risk-off sentiment could also influence the pound after the unprecedented Palestinian group Hamas attacked Israel over the weekend.
The euro fell last week amid ongoing concerns over the health of the economy. PMI data at the start of the week showed that the economy most likely contracted in the third quarter.
Attention is now turning to German industrial production, which is expected to fall by 0.1% in August after declining by 0.8% in July. The data comes after better-than-expected German figures on Friday, which showed that orders rebounded by 3.9% in August after falling over 11% in July.
Still, the data is unlikely to influence the ECB’s interest rate path, although an improving macroeconomic environment would help calm concerns about a prolonged economic downturn in the region and support the euro.
The ECB remains focused on wage growth inflation and service sector prices. ECB chief economist said last week that the central bank would monitor services inflation for a prolonged.
ECB executive board members Andrea Enria and Luis de Guindos are expected to speak today.
