All eyes on GDP
25 April, 2013
Following a relatively stagnant week or so for Sterling rates and in particular the GBP/EUR cross, this morning sees much anticipated UK GDP figures released. If a contraction is seen it will spell triple-dip recession for the UK and could see rates slashed on the back of the news. With analysts split over the result and predictions ranging from contraction of 0.2% to growth of 0.3% undoubtedly the report has the potential to cause large swings in GBP crosses, but if positive could help the pound regain some momentum.
Certainly if we look at the GBP/EUR rate since its overnight 2 cents jump following the Cyprus crisis, the pound has struggled to gain any further ground. And despite even more dire news for the single currency this morning that Spanish unemployment has reach a record high of 27.2%. the Euro is continuing to resist any major gains from the pound.
This lack of movement particular given the ongoing poor Eurozone data is perhaps as a result of fears surrounding the UK economy- in particular triple-dip recession and if that is shown the likelihood of further QE in 2013. In recent weeks the GBP/EUR rate has seemed precariously balanced, but today’s results could shift the balance in either direction.
If you have a currency transfer coming up that involves GBP – either buying or selling – make sure you speak to your Currency Index broker asap, as today has the potential to see lots of movement across the board. Let us help you stay well informed and well ahead of the markets.
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