- Pound (GBP) is holding steady after losses yesterday
- UK house prices remain unchanged in May
- Euro (EUR) rose after the ECB cut rates
- Eurozone GDP grows +0.3% QoQ in Q1
The Pound Euro (GBP/EUR) exchange rate is holding steady after yesterday’s losses. The pair fell -0.146% in the previous session, settling on Thursday at €1.1745 and trading in a range between €1.1731 and €1.1767. At 16:00 UTC, GBP/EUR trades 0.02% at €1.1748.
The euro is holding on to yesterday’s gains after GDP data confirmed growth in Q1 and the European Central Bank right cut interest rates by 25 basis points in line with expectations.
The central bank cut rates for the first time in almost five years, bringing the lending rate to 3.75%, down from the record 4% level.
However, policymakers also revised their inflation forecast upward, saying that inflation would take longer to reach the ECB’s 2% target rate. This, combined with the ECB’s lack of commitment to a future path for cuts, saw the market interpret the meeting with a slightly hawkish bias, which lifted the EUR.
Data today shows that German industrial production unexpectedly fell in March, dropping 0.3% month over month after rising 0.1% in March. The data highlights the slow road to recovery in the eurozone’s largest economy.
Meanwhile, economic growth was recorded in the first quarter; GDP rose 0.3% quarter on quarter after falling -0.1% in Q4 last year. The data was in line with
The pound fell yesterday and is holding those losses today despite UK construction activity growing at the fastest pace in two years in May.
However, data earlier in the week showed that the service sector, the dominant sector in the UK economy, grew at a slower-than-expected pace and down from April’s 11-month high.
Today, no high-impacting UK economic data is due to be released. Mid-tier data showed that UK house prices remained largely unchanged in May as the market continued to stabilise.
The Halifax house price index fell just 0.1% in May on a monthly basis but grew 1.5% on an annual basis.
