FOREX News: Pound Remains Subdued Ahead of US and British GDP Reports
GBP/USD has shown little movement since Tuesday, as the pair trades at 1.2340. On the release front, the highlight of the day is Final GDP. We’ll also get a look at Core Durable Goods Orders and unemployment claims. There are no UK releases on Thursday. On Friday, the US publishes New Home Sales and UoM Consumer Sentiment.
The US economy continues to expand in impressive fashion, as underscored by strong GDP forecasts for the third quarter. Preliminary GDP came in at 3.2%, beating the forecast of 3.0%. Final GDP is expected to be even stronger, with an estimate of 3.3%. If the indicator matches or beats this rosy prediction, the US dollar could respond with gains. In the UK, Second Estimate GDP posted a gain of 0.5%, matching the forecast. No change is expected in Final GDP.
The pound has not looked sharp in the fourth quarter, as GBP/USD has slipped as much as 4.9% during since October 1. The pound took another hit after the Federal Reserve raised rates last week. At the same time, British economic numbers have been respectable in Q4, as the economy has defied the doomsayers who forecast disaster after the Brexit referendum vote in June. On Tuesday, CBI Realized Sales, which measures retail sales volumes, impressed with reading of 35 points. This marked the fastest pace of retail sales growth since September 2015. However, Britain and the European Union will soon begin tough negotiations over Britain’s departure, and if this leads to renewed Brexit jitters, the pound could respond with losses.
