Pound Sterling to Euro (GBP/EUR) Exchange Rate Firms despite Mixed Data Release
The Pound Sterling managed to hold onto recent gains against the single currency on Friday, even as data released by the London based Office for National Statistics suggested that the UK economy slowed slightly in the first quarter of the year.
The Pound Sterling to Euro (GBP/EUR) Exchange Rate Hit a Session High of 1.3839
According to the ONS, industrial output in the UK came in below economist expectations in February. Output was shown to have increased by 0.1% in the second month of the year, below forecasts for a rise of 0.4%.
Manufacturing production meanwhile rose by 1.1% on a year-on-year basis, disappointing expectations for an improvement of 1.3%. On a monthly basis, production rose by 0.4%, matching expectations and beat the revised -0.6% figure recorded in January.
Despite the soft data, economists remain optimistic over the strength of the UK’s economic performance.
‘After an unsure start, it looks like manufacturers are getting back on track and helping to push industrial production back into positive growth. On the ground we see that boardroom confidence and the appetite to invest is high and it appears that this is now translating into healthy pipelines of activity,’ said David Richardson from Lloyds Bank.
The Euro meanwhile was under pressure from concerns that Greece could still be forced out of the Eurozone and as economic data showed that Industrial Production in February stagnated in France.
Worries over Greece are now mounting as the heavily indebted nation only has five days to deliver an improved set of reform measures to the Eurogroup. A decision on whether the next round of bailout funds will be released will be made on April 24.
‘With only five working days remaining for the Greek administration to substantively improve on its reform offerings to the Eurogroup the Greek government faces the Herculean task of developing – and legislating – a reform programme sufficient to unlock the remaining €7.2 billion of bailout funds before the Eurogroup meets on 24 April,’ said the director of Euro area economic research at Daiwa Capital Markets.
The Pound Sterling to US Dollar (GBP/USD) Exchange Rate Fell to a Session Low of 1.4621
The US Dollar advanced against the majority of its most traded peers as the hawkish Federal Reserve meeting minutes released on Wednesday and comments made by Fed policy makers’ buoyed expectations that the Fed will hike interest rates in June.
The ‘Greenback’ was also receiving support from data released on Thursday, which showed that the number of Americans filing for unemployment benefits rose by a less-than-expected margin.
Next week sees the publication of UK inflation, unemployment and average earnings data. Out of the Eurozone there will be inflation, balance of trade and industrial production data.