It’s been a busy morning for the currency markets following the release of the latest UK Gross Domestic Product (GDP) figures. Figures showed that the UK economy grew by 0.8% in the first quarter of 2014, which marked the fifth consecutive period of positive growth for the UK economy. GDP is seen as key in determining the relative health of a countries economic growth and the improvement the UK has seen over the past twelve months are there for all to see.
However, it was not all good news for the UK and the Pound as figures actually came out slightly worse than the expected 0.9% growth. This seems to have stifled the Pound during Tuesday morning trading, with GBP/EUR and GBP/USD rates looking very flat. Despite no further spikes for Sterling it continues to perform well against both its EUR & US counterparts, with rates sitting above 1.21 and 1.68 respectively. Personally I expect GBP to hold its position against both in the short-term as pressure on the ECB increases to counter the threat of deflation to the region, which would have serious negative connotations for the Eurozone were it to happen. Whilst the EUR has found a lot of support around the current levels, any hint of a further rates cut by the ECB, or further economic difficulties in France, are likely to push the Pound through the current resistance barrier.
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