- Pound (GBP) is set to rise across the week
- UK GDP returned to growth
- Euro (EUR) digests ECB minutes
- Eurozone industrial production data is due
The Pound Euro (GBP/EUR) exchange rate is holding steady after losses yesterday. The pair fell -0.24% in the previous session, settling on Friday at €1.1563 and trading in a range between €1.1558 – €1.1599. At 07:35 UTC, GBP/EUR trades +0.01% at €1.1564. The pair is set to rise 0.08% across the week.
The pound fell in the previous session amid rising concerns over the health of the UK economy. UK GDP came in at 0.2% as the economy returned to growth after contracting 0.6% in the previous month. However, the growth was weak and supports the view that the Bank of England may not need to raise interest rates again.
Breaking the figures down further, manufacturing contracted by 0.7%, construction contracted by 0.5%, and services saw a mild increase of 0.4% growth. The lackluster growth comes after the Bank of England raised interest rates by 14 straight meetings, hurting consumer spending and making it more expensive for businesses to invest.
Thinking ahead, there’s no high impacting UK economic data today investors will be focusing on next week’s data releases which will see UK unemployment figures, inflation, and retail sales all due to be released these figures will give further clues over the likelihood of the Bank of England raising interest rates again.
The euro pushed higher after the release of the minutes of the September ECB meeting which. showed that the majority of policymakers were in favour of hiking interest rates by 25 basis points. The minutes also showed that there was a more heated debate between policymakers.
Concerns over the health of the eurozone economy are on the rise and the ECB leaving rights unchanged in November is almost as gives a done deal. However, with risk leaning towards higher inflation, the ECB could still consider raising interest rates in December.
Looking ahead attention all turns to eurozone industrial production which is due to be released today.
