EUR/GBP closed the day higher on Tuesday and was little changed on Wednesday after the UK's Office for National Statistics released real Gross Domestic Product (GDP) data. The ING analyst team expects some stabilization around 0.8550.
The United Kingdom takes a step out of recession
The United Kingdom recorded positive growth (0.2% month-on-month) in January, taking a first step out of recession. The positive GDP data was largely expected, and the pound did not move after the release.
Markets now expect just under three UK rate cuts between now and the end of the year, with a June cut of around 50% and an August cut fully planned.
We had considered a break below 0.8500 premature, given the near-term EUR:GBP rate differentials, and now we expect some stabilization around 0.8550 ahead of Friday's UK data and next week's BoE meeting.
Source: Fx Street
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