- Pound (GBP) rises for a third straight day
- BoE could limit the upside with another rate cut expected
- Euro (EUR) is falling despite an upward revision to GQ3 GDP
- Q3 GDP rose 0.3% QoQ
The Pound-Euro (GBP/EUR) exchange rate is rising for a third straight day. The pair rose 0.04% in the previous session, settling on Thursday at €1.1445. It traded between €1.1420 and €1.1467. At 15:00 UTC, GBP/EUR trades 0.11% at €1.1458. The pair is set to rise 0.37% across the week and trades near a 5-week high.
The pound is rising on Friday for the third straight session, and is on track to book gains for the third straight week as sterling continues its post-budget rally.
The pound has jumped over the past 10 days after Chancellor Rachel Reeves’ long-awaited budget passed the bond market test without significant disruption.
Data this week also showed that the UK composite PMI, a good measure of business activity, was upwardly revised following a stronger-than-expected expansion in the service sector.
Still, gains may be limited, given that attention will turn to the Bank of England meeting on December 18th. The BoE is widely expected to cut interest rates by 25 basis points after a narrow 5-4 vote in the previous meeting.
Attention will also be on UK GDP data, which is expected to show the economy stalled in October at 0% month on month, up from 0.1% contraction in September.
The euro is fully against the pound but rising against the US dollar following an upward revision to eurozone Q3 GDP data.
Data show that the eurozone economy grew 0.3% quarter on quarter in the July to September period Up from the preliminary reading of 0. 2% and above the previous quarter 0.1% expansion the growth was driven by a rebound in fixed investment which rose 0.9% compared to a 1.7% decline in Q2 and stronger government spending up 0.7% versus 0.4% in the previous quarter.
Among the region’s largest economies, Spain and France led the expansion with growth of 0.6% and 0.5% respectively. Meanwhile, Italy grew by just 0.1% and Germany stagnated across the period.