GBP: A little underperformance coming through – ING
|Some softer UK April GDP data this morning has seen sterling come under more pressure, ING's FX analyst Chris Turner notes.
EUR/GBP to trade towards 0.8550 and 0.8600
"Bit of a disappointing UK April GDP figure – down 0.3% on the month. Not a huge surprise. These figures have been hugely volatile recently. In part, that's a frontloading effect – manufacturing surged in Feb and has unwound since."
"But in general, there is mounting scepticism about the figures themselves, in particular given that for the past three years, the first half of the year has been stronger than the second, despite the data supposedly being seasonally adjusted. This suggests second quarter growth as a whole will come in around 0.1% or 0.2%, after 0.7% in the first quarter."
"This softer GDP data, following the softer wage data earlier this week, will suggest the Bank of England does have good reason to cut rates after all. EUR/GBP is close to 0.8500 now, and the building narrative of wider eurozone versus UK policy rate spreads (the ECB has nearly finished easing, the BoE could accelerate rate cuts) warns that EUR/GBP trades to 0.8550 and 0.8600 on a multi-month view."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.