Yesterday saw the release of GDP in the UK. The result surprised the market expectation of 1%, coming in at 1.3% which pushed the GBP/EUR rate away from three-month lows at 1.1750, back up to the mid-1.1800s. GBP/USD’s reaction was relatively muted to the news, sticking closer to the 1.3140 mark. The euro ended the day at 1.1070 yesterday against the US dollar, with the dollar still underpinned by its safe haven status as the conflict continues in Ukraine.
The European Central bank is coming under more pressure to raise interest rates as inflation continues to soar. German annual inflation is currently at 7.3%, Italy is close to 6.7% and France currently stands at 5.1%. As the pressure mounts on the ECB, the possible hike could give the EUR strength to continue its fight back after a tough start to the year against both the pound and US dollar.
This afternoon, US Non-farm payroll employment data is released at 13:30. The forecast is for a further 490K jobs added, lower than lasts months printing of 678K. any large deviation from the forecast could provide a good opportunity to trade.
Have a great weekend.
Thomas Read, Senior Relationship Manager.
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