Pound Mixed After U.K. GDP Data
May 10 2019 - 2:15AM
RTTF2
The pound showed mixed trading against its major counterparts in
the early European session on Friday, after the release of a raft
of strong data on U.K. first quarter GDP, industrial production and
trade for March.
Data the Office For National Statistics showed U.K. economy
expanded in line with forecasts in the first quarter.
Gross domestic product grew 0.5 percent quarter-on-quarter in
the first quarter, after rising 0.2 percent in the previous
quarter. The reading matched economists expectations.
GDP rose 1.8 percent year-on-year in the first quarter,
following a 1.4 percent growth in the fourth quarter. The growth
was in line with forecasts.
Industrial production rose 0.7 percent monthly in March,
following a 0.6 percent rise. Economists were looking for growth to
be stagnant.
Separately, the ONS reported that the visible trade deficit
narrowed to GBP 13.65 billion from GBP 14.43 billion in February.
Economists had forecast a GBP 13.75 billion deficit.
The total trade deficit narrowed to GBP 5.41 billion in March
from GBP 6.22 billion in February. Economists had expected a
deficit of GBP 4.60 billion.
European shares were higher as investors shrugged off the U.S.
decision to increase tariffs on $200 billion worth of Chinese goods
and remained hopeful of a breakthrough in trade talks.
Talks will continue for a second day and a trade deal is still
possible as there is an unofficial window, potentially lasting a
couple of weeks.
The currency traded mixed against its major counterparts in the
Asian session. While it held steady against the greenback and the
franc, it fell against the euro and the yen.
The pound held steady against the yen, after having retreated to
142.51 from a high of 143.24 hit at 9:45 pm ET. At yesterday's
close, the pair was worth 142.73.
The U.K. currency depreciated to 1.2991 against the greenback,
from a high of 1.3026 set at 3:00 am ET. The pound is likely to
find support around the 1.27 region.
After rising to 1.3221 against the Swiss franc at 9:45 pm ET,
the pound reversed direction with the pair trading at 1.3182. The
next possible support for the pound is possibly seen around the
1.29 level.
Moving away from a high of 0.8615 touched at 5:00 pm ET, the
pound slipped to 0.8640 against the euro. The pound is seen finding
support around the 0.88 level.
Data from the Federal Statistical Office showed that Germany's
exports rebounded at the fastest pace in three months in March,
defying expectations for further decline.
Exports rose 1.5 percent month-on-month in March, after a
revised 1.2 percent fall in February.
Looking ahead, Canada building permits for March and jobs data
for April, as well as U.S. consumer price index and monthly budget
statement for the same month are scheduled for release in the New
York session.
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