No surprises in the second read of GDP growth for the third quarter of the year: the economy grew by 0.7%. There is still one more read due. Business investment disappoints with a slide of 0.7%, significantly worse than expected.
GBP/USD is quite stable after the publication. Update: cable is now losing 1.57, but the move may be related to USD strength that is also seen elsewhere in forex markets. However, business investment may be having its say as GDP is not surprising.
While the headlines remains unchanged, there are differences in components: a bigger drop in exports is countered by stronger government and private spending. The aforementioned drop in investments probably has the upper hand in weighing on sterling.
No change was expected in UK GDP growth for Q3 2014: a q/q level of 0.7% was expected to be repeated in the second read. Year over year, the 3% growth level was also expected to remain unchanged.
GBP/USD traded above 1.57 towards the release.
Preliminary business investment was expected to rise 2.3% quarter over quarter, down from 3.3%.
The British pound enjoyed the weakness of the greenback following some unconvincing data from the world’s No. 1 power. Recent data from the UK has been positive, with a surprisingly strong rise in retail sales.
More: GBP/USD: Stronger Recovery Looming: Levels & Targets – JP Morgan
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