UK Economy Edges Back to Growth
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Daily Currency Update
The UK economy returned to growth in November, primarily driven by the service sector, though the pace was slightly slower than anticipated.According to the Office for National Statistics, GDP rose by 0.1% in November, falling short of economists’ expectations of 0.2%. This followed a 0.1% contraction in October. Over the three months to November, the economy stagnated when compared to the three months to August.
From an FX perspective, the modest growth, coupled with lower-than-expected figures, is likely to temper expectations of aggressive monetary policy tightening by the Bank of England. This could weigh on the pound, particularly against currencies benefiting from stronger growth or hawkish central bank stances.
Key Movers
This morning, the US dollar edged lower, hovering just below recent highs, as cooling US inflation data weighed on bond yields.Core U.S. inflation rose by 0.2% month-on-month in December, aligning with forecasts and below November’s 0.3% increase. On an annualised basis, the reading came in at 3.2%, slightly under the anticipated 3.3%.
Expected Ranges
- GBP/USD: 1.2155 - 1.2245 ▼
- GBP/EUR: 1.1805 - 1.1895 ▼
- GBP/AUD: 1.9565 - 1.9655 ▼
- EUR/USD: 1.0245 - 1.0325 ▼