Anticipation arises for the UK Gross Domestic Product data


Last week the pound rallied to its highest level against the euro in two years after the Bank of England hiked interest rates by 25 basis points. However those gains were soon erased by the cautious guidance regarding the UK economic outlook delivered by Governor Andrew Bailey. The BoE revealed the Monetary Policy Committee was a mere single vote away from raising rates by a substantive 50 basis points.


GBP/EUR exchange rate depends on the European side of the equation, as it is subject to the European Central Bank’s decisions. The ECB’s announcement about increasing interest rates earlier than expected helped the euro exchange rates last week.

Markets now expect the ECB to hike and tighten monetary policy at a much slower pace than the US Federal Reserve and the BoE.


The US dollar slowed down its momentum and the pound was able to recover from the initial offer following a hawkish surprise from the ECB last week and the US Non-Farm Payrolls data.

Friday’s Non-Farm Payrolls data was showing an unexpected jump in US jobs created in January. This supported a gain for the dollar initially before it soon fizzled out.

Looking ahead, the markets will turn to the US Consumer Price Index that is being released on Thursday. Domestically, UK Gross Domestic Product is on the cards as a potential catalyst for the pound.

Key announcements