The UK final Q1 GDP/ Current account Overview
The UK docket has the final Q1 GDP report, alongside the current account data, both of which will be published later this session at 0830 GMT. The third estimate of the United Kingdom GDP is expected to arrive at 0.1% in the first quarter, same as that seen in the previous readout. The annualized reading is also expected to show that the pace of expansion held steady at 1.2% in Q1.
Meanwhile, the UK current account deficit is expected to shrink slightly by GBP -18.00 billion in the first quarter versus a GBP -18.443 billion figure booked previously.
Deviation impact on GBP/USD
Readers can find FX Street’s proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 40 pips in deviations up to 2.5 to -2.5, although in some cases, if notable enough, a deviation can fuel movements of up to 70 pips.
How could affect GBP/USD?
The GBP/USD‘s reaction to the UK releases is expected to be short-lived, as the spot will be driven by risk-on sentiment ahead of the US Core PCE data.
“GBP/USD saw rejection at its 20 day moving average at 1.3276 this week but the new low at 1.3049 has been accompanied by a divergence of the RSI. The market is now approaching strong support offered by the 1.3040 October 2017 low, and the 50% retracement at 1.2918, given the divergence of the RSI this reflects a loss of downside momentum and we suspect that it will attempt to recover, Karen Jones, Analyst at Commerzbank notes.
Key Notes
European FX Outlook: Neither German data nor UK GDP is likely to dethrone King Dollar
GBP/USD trying to vault over 1.31 ahead of UK GDP figures, US consumption expenditure for Friday
About the UK final GDP
The Gross Domestic Product released by the Office for National Statistics (ONS) is a measure of the total value of all goods and services produced by the UK. The GDP is considered as a broad measure of the UK economic activity. Generally speaking, a rising trend has a positive effect on the GBP, while a falling trend is seen as negative (or bearish).
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