Forex News
The European Central Bank Governing Council member Martins Kazaks said in an interview with the public broadcaster LTV on Thursday, the central bank could opt for an interest rate hike if rising oil prices deanchored inflation expectations.
“Oil prices are higher, we see that it’s gradually starting to push inflation up, and if inflation expectations start to deteriorate, then the ECB will be forced to raise interest rates,” Kazaks said.
Market reaction
At the time of writing, EUR/USD is down 0.05% on the day, still defending the 1.1700 level.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.00% | 0.01% | 0.00% | -0.00% | -0.01% | -0.02% | -0.05% | |
| EUR | -0.01% | -0.01% | -0.04% | -0.02% | -0.07% | -0.07% | -0.05% | |
| GBP | -0.01% | 0.00% | 0.00% | 0.00% | -0.03% | -0.07% | -0.01% | |
| JPY | 0.00% | 0.04% | 0.00% | -0.02% | -0.03% | -0.06% | -0.07% | |
| CAD | 0.00% | 0.02% | 0.00% | 0.02% | 0.00% | -0.04% | 0.00% | |
| AUD | 0.00% | 0.07% | 0.03% | 0.03% | -0.00% | -0.01% | 0.04% | |
| NZD | 0.02% | 0.07% | 0.07% | 0.06% | 0.04% | 0.01% | 0.03% | |
| CHF | 0.05% | 0.05% | 0.01% | 0.07% | -0.01% | -0.04% | -0.03% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
The UK economy expanded at a quarterly rate of 0.6% in the three months to March 2026, following a 0.1% growth in the fourth quarter of 2025 (Q4).
The data beat the market forecast of 0.6% in the reported period.
The UK GDP rose 1.1% year-over-year (YoY) in Q1 2026 vs. 0.8% expected and a 1.0% growth in Q4.
The monthly UK GDP arrived at 0.3% in March, compared to 0.4% in February (revised from 0.5%), above the market consensus of a 0.2% decline.
Market reaction to the UK data
The upbeat UK GDP data fails to boost the British Pound. At the press time, the GBP/USD pair is down 0.01% on the day to trade at 1.3520.
Pound Sterling Price This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.32% | 0.25% | 0.79% | 0.19% | -0.53% | -0.01% | 0.49% | |
| EUR | -0.32% | -0.08% | 0.54% | -0.15% | -0.86% | -0.37% | 0.16% | |
| GBP | -0.25% | 0.08% | 0.11% | -0.08% | -0.80% | -0.28% | 0.24% | |
| JPY | -0.79% | -0.54% | -0.11% | -0.66% | -1.32% | -0.79% | -0.27% | |
| CAD | -0.19% | 0.15% | 0.08% | 0.66% | -0.62% | -0.14% | 0.29% | |
| AUD | 0.53% | 0.86% | 0.80% | 1.32% | 0.62% | 0.53% | 1.02% | |
| NZD | 0.01% | 0.37% | 0.28% | 0.79% | 0.14% | -0.53% | 0.49% | |
| CHF | -0.49% | -0.16% | -0.24% | 0.27% | -0.29% | -1.02% | -0.49% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
This section below was published at 05:15 GMT on Thursday as a preview of the UK GDP data
- The United Kingdom's Gross Domestic Product is expected to have accelerated in Q1.
- The GDP is forecast to contract in March, which might raise concerns at the Bank of England.
- A weak economic outlook amid the war in Iran and growing political turmoil in the UK might hurt the Pound Sterling.
The United Kingdom’s (UK) Office for National Statistics will release the preliminary estimate of the first quarter’s Gross Domestic Product (GDP) report on Thursday. Market analysts have anticipated a 0.6% growth in the three months to March, after a meager 0.1% advance in the last quarter of 2025.
Quarterly GDP data, however, will be released alongside an array of UK indicators for March, which are expected to show less inspiring figures. The monthly GDP is foreseen contracting by 0.2%, with Manufacturing and Industrial Production falling, amid the war in Iran. If these figures are confirmed, the outlook of a softening economic activity with soaring inflationary pressures might pose a headache for the Bank of England (BoE). This, coupled with the increasing political uncertainty, might unleash a perfect storm for the British Pound (GBP).
UK Gross Domestic Product forecast: What numbers could tell us
The UK economy is expected to show a significant advance in the first quarter of the year, with GDP growth accelerating to 0.6% from 0.1% in the previous quarter. These numbers, however, need to be taken with caution, as the war in Iran seems to have brought economic growth to an abrupt halt at the end of the quarter.
The monthly Gross Domestic Product, which will be released at the same time on Thursday, is expected to show a 0.2% contraction in March, in what would be the worst reading in almost a year. Manufacturing Production is seen extending its decline with a 0.2% contraction in March following a 0.1% drop in February, while Industrial Production is expected to have shrunk at a 0.4% pace in March, after growing 0.5% in February, all in all confirming that the war in Iran and the energy shock stemming from it have crushed economic activity.
The Bank of England (BoE) left its Bank Rate unchanged at 3.75% after its April 30 monetary policy meeting, with one policymaker voting for a quarter-point rate hike, which left hopes of some monetary tightening alive. UK inflation surged to a 3.3% year-on-year level in March, adding pressure on the central bank to adopt a more restrictive policy. Thursday’s figures, however, might bring concerns about recession back to the table and put BoE policymakers on edge.
Beyond that, the local elections held on May 7 brought a sharp reversal for the Labour Party, cutting the ground from under Prime Minister Keir Starmer’s feet. Voices calling for resignation are mounting, increasing the risk of a void of power that might bring back concerns about fiscal slippage and send the GBP into a tailspin.
When will the UK release Q1 GDP, and how could it affect GBP/USD?
The UK will release the preliminary estimate of Q1 Gross Domestic Product (GDP) on Thursday at 06:00 GMT. The quarterly reading is expected to show upbeat figures, but looking in detail, additional data might show that economic activity plummeted after the start of Iran’s war.
The Pound has been losing ground this week, weighed by a growingly uncertain political scenario in the UK, with the position of Prime Minister Keir Starmer in the pillory. Against this background, the risk is of a negative surprise at Thursday’s data, especially in figures from March, as they will heighten concerns about the economic outlook if the Middle East conflict does not come to a swift end, which right now does not seem to be the case.
Guillermo Alcalá, FX Analyst at FXStreet, says: “GBP/USD is heading south after failure to break the resistance area around 1.3650. The pair remains contained within the last few weeks’ trading range, but the risk has shifted to the downside, with bears eyeing the bottom of the channel at around 1.3450. A confirmation below this level would bring the April 8 and 10 highs, at the 1.3480 area, into focus.”
“On the upside, an unlikely break of the 1.3650-1.3660 area, which has capped the pair several times in May, would clear the path towards the February highs between 1.3710 and 1.3730, ahead of the 2026 peak, at 1.3869, says Alcalá.”
BoE FAQs
The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling.
In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling.
Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.
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