Pound Falls As UK GDP Growth Revised Down, European Shares Drop
February 22 2018 - 1:02AM
RTTF2
The pound weakened against its major counterparts in the
European session on Thursday, as the U.K. economic growth was
revised down in the fourth quarter and sentiment worsened on
worries over faster interest rate hikes in the U.S.
The second estimate from the Office for National Statistics
showed that gross domestic product expanded 0.4 percent
sequentially instead of 0.5 percent estimated initially. GDP had
advanced 0.5 percent in the third quarter.
In 2017, the economy grew 1.7 percent, which was also slower
than the previous estimate of 1.8 percent.
European shares dropped after the Fed minutes hinted at the
likelihood of higher U.S. interest rates.
The Fed officials showed more optimism about the US economy,
which raises the possibility to hike borrowing costs gradually.
"A majority of participants noted that a stronger outlook for
economic growth raised the likelihood that further gradual policy
firming would be appropriate," the minutes showed.
The pound traded mixed against its major opponents in the Asian
session. While it held steady against the euro and the franc, it
fell against the greenback and the yen.
The pound dropped to a 6-day low of 148.81 against the yen, from
a high of 149.99 set at 5:00 pm ET. The pound is seen finding
support around the 147.00 level. The pound remained lower at an
8-day low of 1.3870 against the greenback, compared to Wednesday's
closing value of 1.3917.
Reversing from an early high of 1.3071 against the Swiss franc,
the pound hit a 2-day low of 1.3012. The next possible support for
the pound is seen around the 1.29 mark.
Data from the Federal Statistical Office showed that Swiss
industrial production expanded for the third straight quarter in
the three months ended December.
Industrial production advanced 8.7 percent year-over-year in the
fourth quarter, but slower than third quarter's 9.2 percent
spike.
The pound edged down to 0.8854 against the euro, after advancing
to 0.8823 at 5:45 pm ET. The pound is poised to challenge support
around the 0.90 level.
Survey data from Ifo institute showed that Germany's business
confidence weakened in February.
The business sentiment index fell more-than-expected to 115.4
from 117.6 in January. The score was seen easing to 117 in
February.
Looking ahead, at 7:30 am ET, the European Central Bank
publishes account of January 24-25 policy meeting.
In the New York session, U.S. weekly jobless claims for the week
ended February 17 and leading indicators for January, along with
Canada retail sales for December are due.
At 10:00 am ET, New York Fed President William Dudley speaks
about the economic situation in Puerto Rico and the United States
Virgin Islands, following Hurricanes Irma and Maria, at a press
briefing hosted by the Federal Reserve Bank of New York.
Atlanta Fed President Raphael Bostic will speak at the Banking
Outlook Conference hosted by the Federal Reserve Bank of Atlanta at
12:10 pm ET.
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