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Positive GDP data supports pound

Friday 14 January, 2022

Daily Currency Update

The UK GDP monthly release showed that the economy expanded more-than-expected in November, printing a figure of 0.9% against an expected 0.4%. The pound hardly reacted to the data, however it did manage to regain the 0.2%-0.3% it lost on Thursday night against the euro and US dollar. In other data related news, Britain’s industrial sector witnessed a solid recovery in November and the latest UK industrial production data published showed Manufacturing output arrived at 1.1%  in November, compared with the 0.2% expectations. Though not really affecting the pound, this data is certainly a positive economic factor for the UK and creates more of a platform for the Bank of England to potentially raise rates.

Key Movers

US weekly Jobless Claims rose to 230,000 from 207,000. The US dollar struggled to find demand on the back of this data, resulting in the likes of EUR/USD to break the 1.1480 handle but levelling out and closing the day around the 1.1450 handle. EUR/USD is now up for the third session in a row and recording new 2-month highs, along with GBP/USD touching its highest level since late October at around the 1.3750 handle.    

Expected Ranges

  • GBP/USD: 1.3655 - 1.3810 ▲
  • GBP/EUR: 1.1925 - 1.2035 ▲
  • GBP/AUD: 1.8820 - 1.8940 ▲
  • EUR/USD: 1.1395 - 1.1510 ▲