GBP Strengthens as UK GDP Defies Expectations, Easing Recession Fears
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Daily Currency Update
The pound climbed to a one-week high against the US dollar after stronger-than-expected GDP data boosted market sentiment. Official figures from the Office for National Statistics revealed that the UK economy expanded by 0.1% in Q4 2024, defying expectations of a 0.1% contraction. The unexpected growth eased pressure on Chancellor Rachel Reeves, and suggested the economy may be more resilient than previously feared.GBP had already been gaining momentum on optimism surrounding a potential Ukraine-Russia peace deal, and the better-than-expected GDP data has further reinforced confidence in the currency. The latest figures could reduce the likelihood of aggressive rate cuts from the Bank of England, providing support to the pound.
Key Movers
The euro also climbed to a one-week high against the US dollar this morning, as reports that Washington is initiating peace talks with Russia overshadowed a hotter-than-expected US inflation reading.Market sentiment shifted after President Donald Trump, revealed that Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky, were willing to negotiate peace in separate calls with him. Trump's directive for top US officials to begin talks on ending the war has boosted risk appetite, weakening demand for the safe-haven dollar and supporting the euro.
Expected Ranges
- GBP/USD: 1.2475 - 1.2545 ▲
- GBP/EUR: 1.1965 - 1.2035 ▲
- GBP/AUD: 1.9875 - 1.9955 ▲
- EUR/USD: 1.0385 - 1.0455 ▲