Some good news from the UK: the economy grew at a quarterly pace of 0.4% in the third quarter, beating expectations and the slow growth rate seen in the first half of the year. Year over year, the economy grew by 1.5%, also above forecasts. Will this cement the rate hike in next week’s all-important decision?
In a separate release, high street lending stands at 41.6K, within expectations. The Index of Services is up 0.4%, bang on expectations. The stage fully belongs to the beat in GDP and it has a positive impact on the pound.
GBP/USD is up to 1.3165, a bounce of some 50 pips.Resistance awaits at 1.3230. Here is how it looks on the 30-minute chart:
The first release of Britain’s Gross Domestic Product was expected to show a gain of 0.3% q/q in Q3 2017. Year over year, GDP was expected to slow down from 1.5% to 1.4% in Q3. An MPC member had indicated that “growth has significantly slowed down” and cast doubts about the expectations for a rate hike in November.
GBP/USD was trading in a narrow range on lower ground. The pair was around 1.3120 after falling earlier in the week. Support awaits at 1.3030 and resistance at 1.3150.
Sterling has been under pressure amid acrimonious Brexit talks. There is a growing worry that no deal will be reached around the UK’s exit from the European Union.
Here are the latest moves on the pound/dollar 30-minute chart: