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Sterling Dips Despite Above Forecast GDP Report
Sterling and gilt yields moved lower on Tuesday despite a stronger than expected print in UK preliminary Q3 GDP. The currency pair remained above support at the 200-day moving average, as momentum on the currency pair has flattened. Resistance is seen near the October highs at 1.55, while support is near 1.5330.
The UK preliminary Q3 GDP came in sub-forecasts with 0.5% quarter over quarter growth, down from 0.7% in Q2, and 2.3% growth year over year, down from 2.4% in the preceding quarter. The median forecasts had been for a 0.6% quarter over quarter and 2.4% year over year gain. Yesterday’s October CBI industrial trends survey also pointed to an ongoing shrinkage in manufacturing sector activity in early Q4, finding ongoing weakness in exports and a signs of ebbing domestic demand.
Other recent data, however, including retail sales figures, have painted a more upbeat picture. BoE Governor Carney has said on two occasions since mid-year that the question of whether to hike interest rates will come into “sharper focus” at year-end.
The trend on the currency pair appear to be positive as the 20-day moving average is poised to cross above the 200-day moving average, which denotes a medium term uptrend in the exchange rate and points to a higher rate on the currency pair.
The post Sterling Dips Despite Above Forecast GDP Report appeared first on Forex Circles.
