The Pound (GBP) struggled to gain last week after Q3 UK GDP showed the slowest rate of growth in nearly a decade, while ongoing political developments ahead of the 12th December general election continued dominating headlines.

Latest currency news

Over the last fortnight the GBP/EUR exchange rate fluctuated between €1.15 and €1.17 as UK political developments continued to drive demand ahead of the 12th December general election.

The EUR/GBP exchange rate, meanwhile, edged up from £0.85 to £0.86 while GBP/USD drifted from $1.29 to $1.27.

What’s been happening?

Political news remains the driving force behind GBP exchange rate movement, with hopes that the upcoming general election could see the Conservatives secure a majority and break the current Brexit deadlock in parliament lending Sterling some support.

However, GBP gains were capped last week as the UK’s preliminary growth figure for the third quarter revealed the slowest rate of growth for almost a decade.

Tej Parikh, Chief Economist at the Institute of Directors (IoD), said: “The UK economy has been in stop-start mode all year, with growth punctuated by the various Brexit deadlines.”

Last Thursday also saw Germany’s economy avoid a technical recession in the third quarter, with the flash GDP figure rising unexpectedly from -0.2% to 0.1%.

Meanwhile, the US Dollar (USD) began to flag after optimism surrounding a “Phase One” US-China trade deal increased following Beijing’s announcement that it would renew its US poultry imports.

Larry Kudlow, the White House’s Chief Economic Advisor, also commented that the mood between the two superpowers was “pretty good” and that they had made “very good progress” towards a deal.

What do you need to look out for?

The UK’s political developments will continue to drive the Pound this week, with any signs that the Tories can consolidate their lead in the polls boosting Sterling as a sense of political stability returns.

This Wednesday will also see the House of Common’s inflation report hearings. These could weaken the Pound if the Bank of England (BoE) hints at any upcoming rate cuts due to disappointing inflation data.

Meanwhile, Euro (EUR) investors will be awaiting this Thursday’s ECB Monetary Policy Meeting Accounts. Concerning comments about the Eurozone’s outlook could prove EUR-negative.

Looking ahead to this Friday, Germany’s flash Markit Manufacturing PMI for November could further heighten concerns for the Eurozone’s economy, with Germany’s largest sector expected to remain mired in contraction territory.

Our friends at Currencies Direct

At Currencies Direct we’re here to talk currency whenever you need us, so get in touch if you want to know more about the latest news or how it could impact your currency transfers.

Since 1996 we’ve helped more than 250,000 customers with their currency transfers, just pop into your local Currencies Direct branch or give us a call to find out more.

Exclusive Offer for Collins Sarri Statham Clients & Newsletter Subscribers

Find out more

Get Started with CSS

Open an Account

Subscribe to our award winning daily newsletter

Voted "Best Market Newsletter" in 2012, 2014, 2015 and 2017 by the City of London Wealth Management Awards

Subscribe to our newsletter (Popup)

By signing up to our free email, you are consenting to receive these promotions. The newsletter is sent up to three times per day during the week and up to once per day over the weekend and is directed at UK residents. The newsletter contains company news, market movements, CSS research and promotions and breaking economic news. Occasionally our newsletter will contain advertisements from trusted partners. However, we will never give, sell or rent your email address to any other companies. If you want to stop receiving our free emails you can unsubscribe at any time by clicking on the link at the bottom of each email. You can read our privacy policy here.

No, thank you I am already subscribed