[vc_row][vc_column][vc_column_text]Friday’s UK gross domestic product data proved mixed in nature, leaving the pound with limited support ahead of the weekend.

Although the headline annual first quarter gross domestic product accelerated from 1.4% to 1.8% as forecast this failed to ease market worries over the underlying health of the UK economy.

Investors were disappointed as the monthly GDP showed a surprise -0.1% contraction, suggesting that Brexit anxiety has continued to weigh on domestic growth.

With Bank of England (BoE) policymakers reiterating that the course of any future interest rate hikes will be gradual GBP exchange rates remained on the back foot last week.

The mood towards the pound could sour further on Tuesday if March’s average weekly earnings data shows a slowdown in UK wage growth.

Signs that household incomes are coming under renewed pressure would leave investors with little cause for confidence in the economic outlook, pointing towards weaker levels of consumer spending.

Even so, any evidence of political progress on the subject of Brexit could still help to shore up GBP exchange rates in the days ahead.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]

Stronger German trade data bolsters euro exchange rates

The German economy demonstrated fresh signs of resilience last week, bolstering the euro as confidence in the outlook of the Eurozone’s powerhouse economy improved.

March’s German trade data proved encouraging as the surplus widened further than forecast on the month, fuelled by an unexpected rebound in export volumes.

This improvement suggests that the German economy is recovering from the impact of recent global trade tensions, even as the US continues to escalate its trade spat with China.

Confidence in the euro could pick up further if April’s finalised German consumer price index confirms a solid uptick in inflationary pressure.

Fresh signs that inflation across the Eurozone is picking up would give the European Central Bank (ECB) incentive to maintain a cautiously optimistic outlook, limiting the risk of further monetary loosening.

First quarter gross domestic product data may also add to a sense of EUR exchange rate bullishness this week, with forecasts pointing towards a return to growth on the quarter in Germany.

Any disappointment in the growth data, however, would leave the single currency exposed to a renewed selling pressure.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]

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