Pound Euro Exchange Rate (GBP EUR) Gains As GDP Data Reveals That UK Avoided Triple Dip Recession

Modified: Thursday, 25 April 2013 10:28 BST - Written by David Woodsmith

STORY LINK Pound Euro Exchange Rate (GBP EUR) Gains As GDP Data Reveals That UK Avoided Triple Dip Recession

This morning’s key UK GDP growth data for Q1 of 2013 beat expectations, showing that activity levels in Britain’s ailing economy increased by a quarterly 0.3% during the first three months of this year. Analysts had been anticipating a showing of 0.1%, so the figure proved to be a positive one for the Pound Sterling. A showing of less than the expected 0.1% level would have signalled that the UK economy had slipped to an unprecedented triple dip recession. The news that this situation had been averted caused the Pound to be well-supported.

The Pound Dollar exchange rate (currency : GBP USD) was trading up into the middle-1.5400s by the middle part of the European morning session, while the Sterling Euro exchange rate (currency : GBP EUR) had broken up to as high as 1.1826 in the same time frame.

Gains for GBP EUR were also fuelled by more dismal unemployment figures from one of the eurozone’s nation states. As usual, this morning’s Spanish unemployment data made for worrying reading for investors holding the euro. The grim data revealed that a whopping 27.2% of Spain’s workforce is now out of work. The figure, which means that joblessness in the Iberian economy has reached a new record level, held back the single currency on the day, causing the euro to register losses against Sterling amongst other currencies.

Looking ahead to the remainder of today’s session, the key highlights come from the US, with the publication of the latest initial jobs claims. Recent labour market data from the States has been of a weaker than expected tone. If this afternoon’s weekly Initial Jobless Claims number also disappoints, then the Greenback may claw back some of the losses which it has incurred during the early part of today’s session, as investors price-in a reduced chance of the Federal Reserve winding down its mammoth Quantitative Easing policy later in the year.

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