You've landed on our UK website.
Click here to visit our USA website.

If you are having difficulty locating the information you require, we're here to help. Just get in touch and we will do our best to assist you.

Pound firms as UK reports strongest GDP reading since WW2

currency-newsPound firms as UK reports strongest GDP reading since WW2
The pound struck higher on Friday, underpinned by a surprisingly strong expansion of UK economic growth in 2021.

Meanwhile, Sterling is struggling to attract support this morning, with GBP/EUR muted at €1.1926 and GBP/USD slipping to $1.3526. GBP/CAD is subdued at C$1.7243, while GBP/AUD and GBP/NZD hold steady at AU$1.9003 and NZ$2.0424, respectively.

Looking ahead, could GBP exchange rates come under pressure this week with the release of the UK’s latest wage growth figures?

What’s been happening?

The pound firmed at the end of last week as GBP investors welcomed the release of the UK latest GDP figures, after they reported the UK economy expanded by a healthy 7.5% in 2021.

But the full-year GDP release was tempered somewhat by the accompanying fourth quarter figures after a contraction in December saw growth in the last three months of the year undershoot expectations.

Meanwhile, after soaring on Thursday on the back of the latest US inflation figures, US dollar bulls were nowhere to be seen at the end of last week, with USD exchange rates tumbling in tandem with US Treasury yields.

The euro also retreated at the end of the week, with the single currency being pressured by comments from European Central Bank (ECB) President Christine Lagarde published on Friday, in which she suggested raising interest rates would not solve the current inflation problems.

What’s coming up?

Turning to this week, the focus in the first half of the session is likely to be on the publication of the UK’s latest jobs report.

While December’s release is forecast to report unemployment held at an 18-month low, the accompanying average earnings data is expected to show wage growth slowed again at the end of 2021.

This could act as a headwind for the pound if it refreshes concerns over the UK’s impending cost-of-living crisis.

Also of note will be the publication of Germany’s ZEW Economic sentiment index, where another improvement in morale could bolster the euro.

Meanwhile, with USD data releases thin on the ground at the start of the week, the direction of the US dollar is likely to be determined by market sentiment. Will uncertainty over Ukraine result in investors favouring the safe-haven ‘greenback’?
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

Check our exchange rate

Thanks, we'll be in touch.

Check your inbox - one of our currency experts will be in touch to complete your quote.

If you want see our online exchange rates straight away, simply register online & log in.