Tuesday 29th April 2014
For the last week exchange rates have been quite stable, without much volatility. Today however we have seen some choppy movements on the Sterling/Euro rate in particular, following data releases from the UK and Germany. Let’s have a look at how it has affected exchange rates:
Pound slips after growth figures lower than expected
This morning the UK’s latest GDP figures were released, showing that the UK economy grew by 0.8% in the first quarter of 2014. This is the 5th consecutive period of GDP growth - the longest positive run since the financial crisis.
However the Pound fell on the news as the market had been expecting it to be even higher, at 0.9%. Just before the release rates rose slightly in anticipation of a good result as you can see in the chart above. You can also see the sharp drop the moment the actual number was released.
In the currency markets, figures like this are forecast in advance and priced into exchange rates accordingly.
Pound/Euro rates bounce back after German Inflation data
After the UK’s figures, GBP/EUR sat around the €1.21 level. At 1pm Germany released its latest inflation numbers. Much like the UK’s release, Germany’s figures were slightly lower than expected, and this caused the Euro to weaken and become cheaper to buy.
Germany is the EU’s largest economy so that’s why the results had quite a big impact on Pound/Euro rates, helping them to recover up to €1.2180.
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Labels: Best Currency Rates, Best Exchange Rates, Euro/Pound, German Inflation, Pound/Euro, Sterling Forecast, UK GDP