Pound Climbs On Upbeat U.K. GDP Data
The pound firmed against its major rivals in the European
session on Wednesday, as the UK economy grew more than previously
estimated in the fourth quarter.
Data from the Office for National Statistics showed that gross
domestic product grew 1.3 percent sequentially in the fourth
quarter instead of +1 percent estimated initially. The economy had
expanded sharply by 16.9 percent in the third quarter.
Over the whole year of 2020, GDP contracted by 9.8 percent,
slightly revised from the first estimate of a 9.9 percent
The currency was further supported by a pullback in the dollar
ahead of President Biden's speech on infrastructure spending
U.K. shop prices continued to fall in March as non-food
retailers resorted to discounting, according to a data by the
British Retail Consortium.
The shop price index fell 2.4 percent on a yearly basis in
March. Non-food prices were down 4 percent from last year, while
food prices gained 0.3 percent.
The pound appreciated to near a 3-year high of 152.51 against
the yen, after falling to 151.47 at 5:00 pm ET. The pound is seen
finding resistance around the 154.00 area.
The pound approached a 2-day high of 0.8511 against the euro,
off its prior low of 0.8537. The next likely resistance for the
pound is seen around the 0.83 level.
Flash data from Eurostat showed that Eurozone consumer prices
increased at a faster pace in March.
Inflation advanced to 1.3 percent in March, in line with
expectations, from 0.9 percent in February. This was the third
consecutive rise in prices.
The pound reversed from its early lows of 1.2927 against the
franc and 1.3717 against the greenback, gaining to 2-day highs of
1.2998 and 1.3794, respectively. On the upside, 1.31 and 1.41 are
possibly seen as the next resistance levels for the pound against
the franc and the greenback, respectively.
Looking ahead, U.S. ADP private payrolls data for March is
scheduled for release at 8:15 am ET.
In the New York session, Canada GDP data for January and
industrial product price index for February, as well as U.S.
pending home sales for the same month are due out.