GBP/EUR Rebounds After Surprise GDP Growth

The Pound to Euro exchange rate rebounded on Friday, reaching as high as 1.1655 after the release of stronger-than-expected UK GDP data.

The July GDP growth rate was 0.4%, beating consensus forecasts and providing Sterling with a much-needed boost.

However, despite this positive news, investors remain cautious due to ongoing concerns about elevated gilt yields, fiscal policy, and energy prices.

Rabobank commented that UK Prime Minister Burnham's promise of a sound plan for national security will have to be paid for somehow, adding to the uncertainty.

The European Central Bank also raised interest rates by 25 basis points on Thursday, taking the deposit rate to 2.50%, and signaled that inflation is likely to remain above target for an extended period.