- Pound (GBP) is rising for a seventh day
- UK GDP data is due on Thursday
- Euro (EUR) after weak German industrial output
- ECB Lagarde is due to speak
The Pound Euro (GBP/EUR) exchange rate is rising for a seventh straight day. The pair rose +0.1% in the previous session, settling on Monday at €1.1576 and trading in a range between €1.1528 – €1.1587. At 10:35 UTC, GBP/EUR trades +0.01% at €1.1577.
The pound pushed higher in the previous session despite a lack of fresh fundamental drivers. The risk-off mood hit the euro more than sterling at the start of the week. Whilst the pair is booking a seventh straight day of gains, the gains are modest highlighting the fact that the eurozone and the UK economies are in a similar state of affairs.
The UK economic calendar doesn’t really come back to life until Thursday’s monthly GDP release, which is expected to show 0.2% growth after falling sharply in July.
The market is not pricing in a hike in interest rates in November, but a stronger-than-expected GDP could add to hawkish bets. The market is pricing in around a 40% probability of a rate hike in December and a 50% probability of interest rates being raised by February.
Today’s attention will be on the BoE’s financial policy committee summary and records, which are due to be released.
The euro fell in the previous session after German industrial production raised more concerns over the health of the eurozone’s largest economy. German industrial production fell by 0 .2% month on month in August, below the 0.1% forecast, and comes after output fell by 0.6% month on month in July.
A combination of poor demand from China, worker shortages, and high-interest rates have hurt factories in Germany, as well as the fallout from last year’s energy crisis.
The data is just the latest in a string of weaker-than-expected German figures which raised concerns that the economy is heading for a recession in the second half of the year.
Looking head, the eurozone economic calendar is relatively quiet. Instead, attention will be on ECB president Christine Lagarde, who is due to speak. Investors will be watching for any comment surrounding the economic outlook or inflation outlook for the region.
