[vc_row][vc_column][vc_column_text]A better-than-expected UK gross domestic product report helped keep the pound on a positive footing as fears for a potential UK recession eased.

Fresh signs of weakness within the German manufacturing sector, meanwhile, weighed heavily on the euro, with confidence in the Eurozone’s powerhouse economy fading.

Monthly UK growth accelerated 0.3% in July, encouraging hopes that the UK economy may avoid a recession and lifting the pound against its rivals.

Signs of a resilient UK economy helped GBP exchange rates extend their recent rally by fuelling bets for positive growth in the third quarter.

Political developments also lifted demand for the pound, with opposition parties voting down Boris Johnson’s call for a snap general election.

As MPs successfully passed a backbench bill, which could potentially force the Prime Minister to seek an extension to the Brexit deadline, no-deal fears temporarily eased.

However, with the prorogation of parliament a sense of political anxiety could still see the pound fall out of favour in the coming week.

If the government seeks to circumvent the bill and push through a no-deal Brexit, investors are likely to abandon the pound again.

On the other hand, a solid reading from the latest UK average weekly earnings figures may encourage GBP exchange rates to maintain a positive bias.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]

Pound’s bullish run continues as UK recession fears fade

The pound’s rally extended into a second week on Monday with markets cheering the UK’s latest GDP figures.

Sterling consolidated these gains this morning, with GBP/EUR flat at €1.1175, GBP/USD stable at $1.2351 and GBP/CAD rangebound at C$1.6271. GBP/AUD and GBP/NZD are holding steady at AU$1.7993 and NZ$1.9207 respectively.

Coming up this morning, could the UK’s latest employment figures help to extend the upside in GBP exchange rates?

What’s been happening?
The pound got off to a strong start on Monday, carrying its momentum through from last week’s session on the strength of a solid UK GDP release.

Sterling sentiment surged as the Office for National Statistics’ (ONS) report revealed growth accelerated by 0.3% in July, easing fears for a UK recession.

However these gains were trimmed when John Bercow announced he would be stepping down from his position as House of Commons speaker on 31 October.

Trade in the euro was mixed yesterday, with news regarding potential fiscal stimulus from Germany offering only a limited upside ahead of a rate decision by the European Central Bank (ECB).

At the same time, the tone towards the US dollar remained bearish on Monday, with a lull in data robbing the American currency of any fresh impetus.

What’s coming up?
A positive print of the UK’s latest jobs report could further extend the pound’s gains this morning.

With the unemployment rate expected to remain unchanged, accompanying UK earnings figures will be of most interest, with another uptick in wage growth potentially launching Sterling toward a two-month high.

For EUR investors, the ECB’s upcoming policy decision will take centre stage, with forecasts for a ‘substantial’ stimulus package likely to keep the euro suppressed until Thursday.

Finally, the US dollar may struggle to mount a recovery today, with second tier job openings figures unlikely to offer any relief.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]

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