Surprise UK Quarterly GDP Downgrade Weakens Pound Sterling Exchange Rates

click to enlarge

Pound Sterling was largely on weak form yesterday, after the second estimate for 2017 fourth quarter UK GDP was unexpectedly revised lower by the Office for National Statistics (ONS). Quarter-on-quarter growth was revised down from 0.5% to 0.4%, while year-on-year growth was cut from 1.5% to 1.4%. This undermined hopes that the Bank of England (BoE) will vote to hike interest rates in May.

BoE Deputy Governor Sir David Ramsden will give a speech on productivity today; this has been a key issue for the UK economy so if he sounds optimistic on output growth the Pound could make gains.

GBP/EUR Exchange Rate Insipid despite Cautious ECB Meeting Minutes

The GBP/EUR exchange rate weakened yesterday, despite a disappointing set of meeting minutes from the European Central Bank (ECB) January policy meeting. It had been hoped that the Governing Council would soon begin to shift the tone of its monetary policy communications in an attempt to gradually prepare markets for the eventual end of QE and tightening of interest rates. However, the minutes show policymakers rejected the notion of making even the slightest of changes, revealing that they are still worried by the sluggish pace of inflation within the currency bloc.

There is a slew of finalised Eurozone data due for release today, as well as German consumption, government spending and capital investment data, which could boost the Euro if it shows that the currency bloc economy continues to see its private sector and government investing in the domestic economy.

* This article has been written by a third party not owned or controlled by Spanish Property Insight (SPI).
SPI disclaims any responsibility or liability related to your access to or use of any third party content.

About torfx

TorFX is a foreign currency exchange broker established in 2004 to provide foreign exchange and international payments to both individuals and companies. TorFX is authorised by the Financial Conduct Authority under the Payment Service Regulations 2009 for the provision of payment services. Their FCA number is 517320. To verify their authorisation, you can visit the Financial Services Register and search the register using their FCA number.