Pound Lower After Weak U.K. GDP Data
February 11 2019 - 12:36AM
RTTF2
The pound declined against its major counterparts in the
European session on Friday, after a data showed that the U.K.
economy unexpectedly contracted in December, intensifying worries
over a looming Brexit.
Data from the Office for National Statistics showed that gross
domestic product fell 0.4 percent from November, when it grew 0.2
percent. Economists had forecast the economy to stagnate for the
month.
The economy expanded 0.2 percent quarter-on-quarter following a
0.6 percent growth in the third quarter. Economists were looking
for a 0.3 percent growth.
Industrial production dropped 0.5 percent on a monthly basis
after a 0.3 percent decline in the previous month. The industrial
output was expected to grow by 0.1 percent.
Separate data from the ONS showed that the visible trade deficit
rose to GBP 12.1 billion in December from GBP 12.02 billion in
November. Economists had expected a deficit of GBP 11.95
billion.
The currency showed mixed trading against its major counterparts
in the Asian session. While it held steady against the euro and the
greenback, it rose against the yen. Against the franc, it
dropped.
The pound retreated to 142.09 against the yen, from a 4-day high
of 142.56 touched at 4:00 am ET. On the downside, 140.00 is likely
seen as the next support level for the pound.
Preliminary data from the Federal Statistical Office showed that
Switzerland's headline consumer price inflation slowed for a third
straight month in January.
The consumer price index rose 0.6 percent year-on-year after a
0.7 percent increase in December. The easing was in line with
economists' expectations.
Extending early slide, the pound fell to a 4-day low of 1.2895
against the greenback from Friday's closing value of 1.2936. The
next possible support for the pound is seen around the 1.26
level.
Having climbed to 0.8745 against the euro at 5:30 pm ET, the
pound reversed direction and dropped to a 4-day low of 0.8774. The
pound is likely to find support around the 0.89 level.
The pound fell back to 1.2922 against the franc following the
data, not far from a 4-day low of 1.2910 set early in the Asian
session. This may be compared to a weekly high of 1.3056 seen at
5:00 pm ET. The pound is seen finding support around the 1.28
level.
In today's events, at 11:15 am ET, Federal Reserve Governor
Michelle Bowman will deliver a speech at the Annual American
Bankers Association Conference for Community Bankers in San
Diego.
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