Pound Advances As UK GDP Expands More Than Estimate
June 29 2018 - 02:07AM
RTTF2
The pound climbed against its major counterparts in the European
session on Friday, as the UK economy expanded more than the
previous estimate in the first quarter.
Data from the Office for National Statistics showed that gross
domestic product grew 0.2 percent sequentially in the first
quarter, which was revised upward by 0.1 percentage points,
reflecting improvement in construction output.
Nonetheless, the pace of growth was weaker than the 0.4 percent
seen in the fourth quarter of 2017.
Sentiment improved after China eased restrictions on foreign
investment in several sectors and European Union leaders reached a
compromise deal on migration, helping avert a political crisis in
Germany.
The currency traded mixed against its major counterparts in the
Asian session. While it fell against the franc and the euro, it
rose against the yen and the greenback.
Having fallen to a 3-1/2-month low of 0.8891 against the euro at
11:00 pm ET, the pound reversed direction and bounced off to
0.8836. The next likely resistance for the pound is seen around the
0.87 level.
Flash data from Eurostat showed that Eurozone inflation
increased in June on food and energy prices.
Inflation rose to 2 percent in June, in line with forecast, from
1.9 percent in May. The European Central Bank's targets 'below, but
close to 2 percent'.
The pound strengthened to a 2-day high of 1.3183 against the
greenback, from a low of 1.3067 seen at 5:15 pm ET. Next key
resistance is possibly seen at 1.33 for the pound.
The U.K. currency climbed to a 4-day high of 145.93 against the
yen, after falling to 144.35 at 8:45 pm ET. The pound is seen
finding resistance around the 147.00 region.
Data from the Ministry of Land, Infrastructure, Transport and
Tourism showed that Japan's housing starts grew unexpectedly in
May.
Housing starts advanced 1.3 percent annually, faster than the
0.3 percent increase seen in April. Housing starts were forecast to
drop 5.7 percent in May.
The pound firmed to a 2-day high of 1.3105 against the franc,
reversing from near a 4-month low of 1.3023 hit at 11:00 pm ET. The
pound is poised to test resistance around the 1.33 level.
Survey results from the KOF Swiss Economic Institute showed that
a measure signaling future turning points in the Swiss economy
improved unexpectedly in June.
The KOF leading indicator rose to 101.7 in June from 100.0 in
May. Meanwhile, economists had expected the index to fall to
99.7.
Looking ahead, Canada GDP data for April and industrial product
price index for May, U.S. personal income and spending data for May
and final consumer sentiment index for June are scheduled for
release in the New York session.
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