- Pound (GBP) rises adding to last week’s gains
- UK economy grows 0.1% MoM in February
- Euro (EUR) falls despite industrial output rising 0.8%
- ECB chief economist Philip Lane is due to speak
The Pound Euro (GBP/EUR) exchange rate is rising after gains in the previous week. The pair rose 0.3% in the previous week, settling on Friday at €1.1693 and trading in a range between €1.1645 and €1.1728. At 10:00 UTC, GBP/EUR trades +0.19% at €1.1715.
The euro is trading under pressure despite eurozone industrial output pushing up in February. Industrial output increased 0.8% compared with a month earlier, according to figures published on Monday. This was a vast improvement compared to the 3% slump recorded in January.
Even so, production remains subdued in the eurozone, and output in February was down 6.4% compared to the same month a year earlier.
However, there are signs that the decline could be bottoming out with production driven by the larger member nations expanding, including Germany, by 1.1%, 0.2% in France, and 0.1% in Italy.
The data comes after the ECB signaled to a June rate cut last week. This means that the ECB could be cutting interest rates ahead of the Bank of England, which is keeping the euro under pressure compared to the pound.
Looking ahead, attention will also be paid to ECB chief economist Philip Lane, who is due to speak later and could offer further insight into the future path for rate cuts.
The pound is edging high, adding to gains from the previous week. Data on Friday showed that the UK economy likely exited a shallow recession in the first quarter.
GDP data for February showed a 0.1% gain after growth of 0.3% in January, up from the 0.2% previously reported.
The data suggests that the UK economy is on a firmer footing. The three-month average rose to 0.2% in February, suggesting that the UK is no longer in a recession.
There is no high impact in UK economic data today; however, this week sees the release of UK labour market figures tomorrow and UK inflation data later in the week, which could provide more clues on the likelihood of a Bank of England rate cut this June.
