The UK economy expanded more than expected in February, with the 0.5% growth exceeding initial forecasts of 0.1% growth. The main driving force behind the growth was due to both the services activity and industrial production both increasing by 0.5% each. Construction also jumped by 1% which came as a surprise considering the unexpected wet weather in February.
The strong February performance has likely pushed first quarter GDP to 0.6% which again would come in higher than the initial projected 0.3% growth. This data should be taken lightly however as March PMI releases would lead to a suggestion that growth has already started to retrace again.
The fact the Pound is pretty much unmoved this morning is mainly down to two points, firstly these figures are from February and are now seen as a little outdated. And on top of this, the IMF went and downgraded The UK’s growth forecasts earlier this week which now puts a dampener on what initially seemed like a potential upturn in economic hopes.
Elsewhere Australian employment growth has come in slightly under expectations, having created only 18,000 jobs in March, falling short of the 20,000 expected figure. With the release being deemed close enough to forecasts, the Reserve Bank of Australia are expected to implement another interest rate of 25 basis-points to follow on from last month’s increase.
At the top of the hour, we have inflation figures for Europe. The release is their harmonized inflation figures which compares general inflation across all member states. Both monthly and yearly figures are set to be unchanged, with yearly inflation currently sitting at 2.5%. Any surprises on the market could provide clues as to what The European Central Bank do with interest rates, as a higher reading would ultimately bring further price pressures for households over the coming months.
This afternoon our attention switches to U.S jobs data with the releases of Continuing Jobless Claims and Initial Jobless Claims. Both releases are set to be a mixed bag so generally the 4-week average will provide a clearer picture, as well as potentially having a more concrete effect on exchange rates.
GBP/EUR 1.1493 GBP/USD 1.3544 GBP/AED 4.9786
GBP/AUD 1.8884 GBP/CHF 1.0597 GBP/CAD 1.8590
GBP/NZD 2.2972 EUR/USD 1.1772 GBP/ZAR 22.1828