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UK recovering out of recession

Daily Currency Update

The UK appears to be emerging from recession with this morning's GDP figures revealing growth for the second consecutive month in February, signalling a clear path toward recovery from the economic downturn.

During the last stretch of 2023, the UK economy experienced a contraction while sterling battled against mounting inflation. However, in the three months leading up to February, GDP saw a modest expansion of 0.2% when compared to the preceding two months.

Key Movers

The euro might face significant strain as speculation mounts that the Federal Reserve could refrain from cutting rates throughout the year, or if it does, it might only do so late in the final quarter. Any additional decline in the euro's value could potentially trigger an uptick in inflation.

Despite inflation nearing the Central Bank's 2% target, Christine Lagarde refrained from succumbing to the urge to reduce rates at the latest meeting. Acknowledging the economy's persistent weakness in the first quarter, she opted for caution.

Expected Ranges

  • GBP/USD: 1.2455 - 1.2535 ▼
  • GBP/EUR: 1.1705 - 1.1745 ▲
  • EUR/USD: 1.0635 - 1.0695 ▼

Written by

See Wah Li

OFXpert

See Wah is passionate about supporting positive transformations when it comes to managing foreign exchange. As a Senior Currency Consultant at OFX, his goal is to help businesses make informed decisions, alleviate risks, and enhance their currency strategies for success. With over 6 years of experience in the foreign exchange market, See Wah’s strength lies in developing effective solutions to help navigate the complexities of currency fluctuations and mitigate their impacts on business profitability.