Data from the UK economy demonstrate the largest-ever drop in GDP. The pound is depreciating, but these are minimal losses.
It is bad, but it was supposed to be even worse
In the morning, a set of macroeconomic data from the United Kingdom was presented. GDP in the Islands contracted in the Q2 by 23.4% on a quarterly basis and by 21.7% on an annual basis, with the deepest falls in both cases at least since 1955, when these statistics were developed.
In both cases, however, the results were slightly better than the market consensus. In July, monthly GDP growth of 8.7% and industrial production of 9.3% were also above expectations. Overall, the large part of the data set for Q2 and July exceeded expectations. However, the future of the labour market remains a matter of concern.
In the next part of the year, programmes supporting the maintenance of employment will expire. The fear is that this may increase unemployment and consequently reduce consumer demand. This could negatively affect the path of economic activity, which in Europe has been one of the most affected by the pandemic.
The pound was affected but just a little
The pound was weakening slightly today, the GBP/USD exchange rate fell to 1.30, the GBP/PLN exchange rate dropped to around 4.86, and the EUR/GBP quotations rose just over 0.90. However, these were not fundamental changes and were within the ranges observed in previous days.
Currently, the market has a very limited response to past months' data, looking ahead to the autumn period, which may prove to be crucial for the return of the UK economy (and not only) to pre-pandemic conditions.
The zloty appreciates when the dollar goes down in red
The main currency pair quotations, i.e. the EUR/USD, are now in the range of approx. 1.172-1.18, and those levels are well known from the previous days.
The zloty's situation remains unchanged, as does the trend-setting situation of the dollar—the Polish currency benefits from the dollar weakness. The lack of fundamental changes in the dollar's valuation stabilises the zloty among the top emerging currencies in the last month, just behind the Czech koruna and the forint. The USD/PLN quotations are in the range of approx. 3.73-3.76 and the EUR/PLN fluctuates around 4.40. The lack of significant events until the end of the day suggests stabilisation around current levels.