Weaker UK growth figures – ING

GBP/USD traded above 1,310 as European currencies benefited moderately from Harris being seen as the winner of the debate, but struggled to hold on to gains this morning after some weaker-than-expected monthly UK GDP figures, notes Francesco Pesole, ING’s currency strategist.

ECB meeting may favor EUR/GBP gains in the short term

“July growth was 0.0% month-on-month vs. 0.2% expected, and industrial production remained weak at -1.2% vs. a consensus of -0.1%. This probably throws some cold water on the recent notion of UK “exceptionalism”, especially compared to the Eurozone, but at the same time it is not a game changer for the Bank of England at this stage.

“We see that EUR/GBP has bottomed for the time being and we are finding tentative support. We think tomorrow’s ECB meeting may favor a near-term rise and a chance to return to 0.850 by the end of September.”