Yesterday GDP figures came in line with expectations at 0.4%. Having weathered the Autumn Budget and reduced forecasts for economic growth earlier in the week, GBP exchange rates suffered broad losses following downbeat IFS report – suggesting that Britain was facing two ‘lost decades’ of earnings growth.
Today there is no data being released from the UK. Fortunes will likely depend on the success of Theresa May’s visit to Brussels. If the PM makes a well-received improved offer, then Sterling could rally. If progress stalls again – GBP could be hit.
EUR
Yesterday manufacturing and services data was released from Europe. The figures impressed and came in above expectations. Sending GBP/EUR exchange rate down 50 pips.
The outlook for inflation was a little less positive – suggesting a ‘substantial degree of monetary policy accommodation’ is likely for the foreseeable future. There is no significant data from Europe today.
USD
Bank holiday yesterday in the US for Thanksgiving. Therefore, no US dollar payments were made. GBP/USD exchange rate softened from a five-week high – as profit-taking took the Pound lower during thin trading.
The Pound could find itself with further losses this afternoon. When the US manufacturing PMI is expected to rise from 54.6 to 55.0.