Currency News

Daily Exchange Rate Forecasts & Currency News

Foreign Exchange Rates : GBP EUR Down on Positive German and French GDP Figures

May 13, 2011 - Written by John Cameron

The Pound Euro exchange rate (GBP EUR) is 1.1408. The Pound Dollar exchange rate (GBP USD) is 1.6282.

Yesterday saw the Pound suffer significant losses against the other majors for the first time this week.

The tone was set for Sterling with the release of UK Industrial Production figures yesterday morning. The numbers showed that factory output has expanded by a monthly 0.3% in March versus analysts’ expectations of a 0.8% gain, causing Sterling to start the day on the back foot.

The Pound came under further selling pressure with the release of the closely-watched NIESR GDP Growth Estimate, which predicted that the UK economy grew by just 0.3% in the three months to April. This compares to a quarterly growth rate of 1.1% last summer.

These two data releases suggest that although the British economy has avoided slipping into a double-dip recession, it has clearly suffered its second slow-down of recent times, which gives the Bank of England little leeway to tighten monetary policy in the near-term.

Elsewhere, Australian Employment Change figures for April showed a surprise drop in the number of Australians in paid employment. This caused a dip in global appetite for risk and caused the GBP AUD exchange rate to climb above 1.5450 for the first time since Friday.

In the US, Federal Reserve Chairman Ben Bernanke pleaded with US politicians to stop arguing and reach agreement on the proposed US national debt-limit, stating that a failure to do so might risk a de-stabilisation of the financial system similar to that caused by the demise of investment bank Lehmann Brothers. Bernanke’s comments caused further risk aversion in the markets, causing some support for the USD.

Finally, the Euro has gained ground in early trading today with the release of French and German Q1 GDP growth figures. These numbers showed that the German and French economies grew by 1.5% and 1.0% respectively in the first quarter of 2011, versus an anticipated 0.9% and 0.6%.
Advertisement

Like this piece? Please share with your friends and colleagues:

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.


TAGS: American Dollar Forecasts Daily Currency Updates Euro Forecasts Pou Forecasts

Comments are currrently disabled