- Pound (GBP) steadies after gains last week
- BoE and slew of UK data due
- Euro (EUR) treads water ahead of ECB rate decision
- Eurozone data has been mixed
The Pound Euro (GBP/EUR) exchange rate is edging a few points lower after booking gains across the previous week. The pair rose 0.4% last week, settling on Friday at €1.1634 after trading in a range between €1.1566 – €1.1681. At 06:25 UTC, GBP/EUR trades flat at -0.08% at €1.1624.
The pound pushed higher last week despite little in the way of high-impacting economic data. The pound received a boost on Friday after Britain set out a raft of new measures to boost the city of London’s role as a global financial centre.
The 30 new measures included, among them, an easing of capital requirements for smaller lenders and other rules undoing some of the top rules introduced after the global financial crisis.
This week is set to be a big week for the pound with the release of inflation data, PMIs, and retail sales in addition to the final Bank of England monetary policy meeting of the year.
Before that, today’s UK GDP data will be in focus and is expected to show the economy contracted 0.4% in the three months to October, down from a 0.2% contraction in the three months to September. However, on a monthly basis, GDP for October is expected to rise 0.4% after contracting 0.6% in September. The UK economy is broadly expected to fall into recession in the final quarter of the year.
The euro slipped last week after mixed signals from the economic data. The November PMIs were downwardly revised, pointing to an economic contraction. Retail sales in October also declined by 1.8%. However, Q3 GDP data was slightly stronger than initially expected at 0.3% quarter on quarter.
This week is also expected to be a big week for the euro with the release of inflation data PMI figures, as well as the European Central Bank interest rate decision. The ECB is expected to raise interest rates by 50 basis points after two straight meetings of 75 basis point hikes