GOOD MORNING FROM EURO FX Pound struggling ahead of today’s ECB rate decision and GDP figures
The pound remained subdued during yesterday’s trading session, with both GBP/EUR and GBP/USD failing to strengthen as markets remained wary in advance of the UK’s latest GDP figures. The pound struggled during Wednesday’s trading session as a lack of domestic data led markets to focus on the UK’s upcoming GDP figures. Economists predict that a run of soft UK data at the start of 2018 will see UK economic growth slow from 0.4% to around 0.3% in the first quarter. These forecasts proved to place significant pressure on Sterling yesterday, especially as some investors fear that a slowdown in GDP is unlikely to bolster the case for a rate hike from the Bank of England (BoE) next month. Movement in the GBP/EUR exchange rate was also supressed yesterday in the run up to the ECB’s rate decision later this afternoon. Analysts are not expecting Mario Draghi to drop any major bombshells regarding monetary policy today. Instead they suspect the ECB President will advocate for a weaker euro, warning that the single currency’s strength is hampering efforts to bolster inflation. Meanwhile the GBP/USD exchange rate traded close to a one-month low on Wednesday, with investors flocking to the US dollar as US treasury yields held above 3%.