- Pound (GBP) rises, extending gains from last week
- UK GDP beat forecasts
- Euro (EUR) falls on German recession fears
- German wholesale prices fall -2.8%
The Pound Euro (GBP/EUR) exchange rate is rising at the start of the week extending gains from the previous week. The pair rose +0.4% last week, settling on Friday at €1.1595 and trading in a range between €1.1533 – €1.1645. At 07:35 UTC, GBP/EUR trades +0.04% at €1.1601.
The pound pushed higher in the previous week after data showed that the UK economy grew at a faster pace than expected. GDP data revealed that the economy grew 0.5% month on month in June thanks to the warmer weather, and the economy grew 0.2% quarter on quarter in the second quarter, up from 0.1%.
The data comes after the Bank of England dropped its recession forecast in May and says that it expects the UK economy to grow at around 0.2% a quarter in the near term.
Today, the UK economic calendar is quiet. Looking across the week, attention will be on UK inflation and jobs data which could provide further clues as to whether the BoE will raise interest rates again in September. The data is expected to paint a mixed picture, with inflation cooling but wage growth remaining strong.
The euro trades lower after German wholesale prices fell by more than expected in July. Prices fell -2.8% year on year, after falling -2.9% in June. Analysts had predicted a -2.6% annual decline.
The data comes as the weak demand environment continues to weigh on output prices fueling fears of a recession in Germany.
The data comes after the ECB’s Economic Bulletin last week raised some concerns over the economic growth and inflation outlook, fueling bets that the central bank could be nearing the end of its hiking cycle.
Looking ahead, the economic calendar is quiet for the rest of the day, and tomorrow is a public holiday in parts of Europe so trading volumes could be low. Later in the week, eurozone GDP and inflation data will be in focus.