beeplayingcards| Bonda Asia: Economic data performed well and the pound closed higher against the market
May 13thBeeplayingcardsAccording to figures released by the Office for National Statistics last Friday, GDP in the UK grew by 0% in the first quarter compared with the same period last year.Beeplayingcards0.2%, higher than expected by 0% and the previous value of-0.2%, the economy temporarily reversed the trend of recession. In addition, UK GDP grew 0.6 per cent month-on-quarter in the first quarter, the strong pace since the fourth quarter of 2021 and sharply exceeding analysts' expectations of 0.4 per cent. Consumption returned to growth in the first quarter, the slowdown in strikes provided a positive boost to the transport sector, and corporate investment was much stronger than expected. The rebound in services and manufacturing pushed UK GDP growth to 0.4 per cent month-on-month in March from 0.1 per cent last month (revised up to 0.2 per cent), better than market expectations of 0.1 per cent. Yael Selfin, chief UK economist at KPMG, said: "the worst of the UK economy is over. Forward-looking indicators show that the economy will continue to grow in the coming months, which is in line with our view. " Britain's GDP shrank by 0.4% in the second half of last year, the slightest recession in the past 70 years.
Separately, according to the minutes of the April monetary policy meeting released by the European Central Bank on Friday, inflation in the euro area is expected to fall back to the target level of 2% next year, so ECB policy makers concluded last month that they may cut interest rates in June. The ECB left interest rates at record highs last month, but made it clear that if wage and inflation data remained at current relatively modest levels, the next step would be to cut rates, most likely on June 6. "if the additional evidence received before the June meeting confirms the medium-term inflation outlook contained in the March forecast, then the committee is likely to start loosening monetary policy restrictions at the June meeting," the minutes said. " Policy makers seem to be very confident about the outlook, and some committee members believe that the conditions for interest rate cuts were met in April. But the proposal was eventually rejected by an overwhelming majority of committee members, who advocated patience until more wage and price data were released.
The data to watch today are the monthly rate of construction permits in Canada in March and the one-year inflation forecast of the New York Fed in April.
Dollar index
The dollar index fluctuated upward on Friday, closed slightly higher on the daily line, and is now trading around 105.30. In addition to short covering to a certain degree of support to the exchange rate, the hawkish remarks made by Fed officials during the period of time also provide some support to the exchange rate. In addition, the risk aversion triggered by geopolitical tensions has also provided some support for the safe-haven dollar. Today, we will focus on the pressure situation near 105.80, with the lower support around 104.80.
EUR / USD
The euro fluctuated downwards last Friday, closing slightly lower on the daily line, and is now trading around 1.0770. In addition to profit-taking and technical selling near the 1.0800 mark, the rebound of the dollar index supported by positive factors such as hawkish comments from Fed officials has also exerted some pressure on the euro. In addition, the expectation of an interest rate cut by the European Central Bank in June also weighed on the exchange rate. Today, we will focus on the pressure situation near 1.0850, with the lower support around 1.0700.
Sterling / dollar
The pound fluctuated and consolidated last Friday, the daily line closed slightly higher, and the exchange rate is now trading around 1.2520. The economic data released by the UK performed well during the period, especially the good GDP data, which showed that the worst of the UK economy was over and was the main reason to support the rise in sterling. However, the Bank of England's expectations of a rate cut in June and a higher dollar index limit the room for rise. Today, we will focus on the pressure situation near 1.2600, with the lower support around 1.2400.