The Pound has been trading around 0.40% higher against the Euro (GBP/EUR) and Danish Krone (GBP/DKK) on Wednesday after UK data outperformed market expectations and the European Central Bank (ECB) kept interest rates on hold.
The UK Industrial Production figure climbed out of contraction territory in February on the year, at 0.1% after January’s -0.3%. Meanwhile, the UK Manufacturing Production reading also stepped into growth in February, coming in at 0.6% on the year after contracting by -0.7% in the month before. The ecostat shows a surge in stockpiling given the Brexit uncertainty currently in the UK and the possible threat to supply chains. Construction Output also made strides, surging from 2.2% to 3.3% in February on the year.
UK GDP Climbs Above Forecasts, Pound Euro (GBP/EUR) Exchange Rate Strengthens
Another figure to surprise was the UK’s Monthly Gross Domestic Product (GDP) stat which came in at 0.2%, rather than flatlining at 0.0% as forecast after the previous 0.5% print. However, the rolling three-month readings offer a more accurate picture of the state of growth, and only 0.3% growth has been recorded in the three months through February on the year.
Deloitte Chief Economist Ian Stewart commented:
‘The UK is proving more resilient than expected in the face of a global slowdown and Brexit headwinds. The pace of growth could be choppy, but the UK is likely to grow at about the same pace as the euro area this year.’
Euro and Danish Krone Exchange Rates Fall – Gives Dovish Outlook
Meanwhile, the European Central Bank (ECB) opted to keep interest rates on hold once again in April. ECB President Mario Draghi also insisted that the chance of the currency bloc dipping into recession remained low, but threats from across the pond to place tariffs on exports has hurt confidence. On the topic of inflation, he suggested that it may fall in the months ahead. The Pound to Euro (GBP/EUR) exchange rate is trading at levels of 1.1632.
In Denmark, the Inflation Rate stat released today showed an increase from 1.1% to 1.2% in March. The Pound to Danish Krone exchange rate is currently trending in the region of 8.6833.