- The EUR/GBP cuts recent profits to around 0.8430 in the first European session on Thursday.
- The preliminary GDP of the United Kingdom grew by 0.7% intertrmetral in the first quarter of 2025, stronger than expected.
- Investors prepare for the GDP report of the first quarter of the Eurozone, which will be published later on Thursday.
The EUR/GBP crossing cuts recent profits about 0.8430 during the first European session on Thursday. The sterling pound (GBP) advances slightly after the publication of the United Kingdom’s growth numbers. Attention will focus on the preliminary reading of the Gross Domestic Product (GDP) of the Eurozone for the first quarter (Q1), which will be published later on Thursday.
The data published by the Office of National Statistics (ONS) on Thursday showed that the economy of the United Kingdom grew by 0.7% intertrmetral in the first quarter of 2025, compared to a 0.1% increase in the fourth quarter of 2024. This figure was better than the estimation of an increase of 0.6% in the informed period.
Meanwhile, the GDP of the United Kingdom expanded 1.3% year -on -year in the first quarter against the 1.5% previous. This reading was above the 1.2%market consensus. The monthly GDP of the United Kingdom reached 0.2% in March, after a growth of 0.5% in February, stronger than the expected 0%. The GBP is slightly strengthened in an immediate reaction to the optimistic data of the United Kingdom GDP.
In the front of the euro, the growing expectation that the European Central Bank (ECB) will deliver additional cuts of interest rates due to the confidence that US tariff measures will not significantly raise inflation in the eurozone could weigh on the shared currency. Financial markets see a 90% possibility of a rate cut in June and anticipate another cut or two in the following months.
GDP FAQS
The gross domestic product (GDP) of a country measures the growth rate of its economy for a certain period of time, normally a quarter. The most reliable figures are those that compare GDP with the previous quarter (for example, the second quarter of 2023 with the first of 2023) or with the same period of the previous year (for example, the second quarter of 2023 with the second of 2022).
The annualized quarterly figures of GDP extrapolate the growth rate of the quarter as if it were constant for the rest of the year. However, they can be misleading if temporary disturbances affect growth in a quarter but it is unlikely that they last all year, as happened in the first quarter of 2020 with the burst of the coronavirus pandemic, when the growth collapsed.
A higher GDP result is usually positive for the currency of a nation, since it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting greater foreign investment. Similarly, when GDP falls it is usually negative for the currency.
When an economy grows, people tend to spend more, which causes inflation. The Central Bank of the country then has to raise interest rates to combat inflation, with the side effect of attracting more world investor capital tickets, which helps the appreciation of the local currency.
When an economy grows and GDP increases, people tend to spend more, which causes inflation. Then, the country’s central bank has to raise interest rates to combat inflation. Higher interest rates are negative for gold because they increase the opportunity cost to keep gold in the face of placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for the price of gold.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
