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Will UK GDP boost or sink the pound?

business-articlesWill UK GDP boost or sink the pound?
  • UK Q1 growth expected to increase
  • Potential for euro gains limited
  • US-China trade tensions set to drive USD
 Sterling traders look to GDP print to restore confidence
 
The pound resumed its slide against most majors yesterday, but it could get a boost this morning when the latest GDP figures are published, revealing how the UK economy fared in Q1 2019.
 
Current expectations are for there to be a 1.8% rise on an annualised basis, with economists expecting to see the more important quarterly figure clock 0.5% growth.
 
Either way, there will also be a slew of other data to influence Sterling traders, including industrial and manufacturing production figures, as well as the March trade balance.
 
Euro strength continues but for how much longer?
 
Wednesday’s German industrial production data continued to lend the euro support yesterday, as markets stayed firm on the single currency ahead of next week’s key German growth rate stats.
 
Today’s trade balance data for Germany, as well as the latest French industrial production figures, could cause some euro movement if they surprise.
 
Nevertheless, in the absence of any more salient data today the potential for further euro gains is limited.
 
Explosive Trump fails to calm market jitters over US-China trade row
 
All eyes were on Washington yesterday, with the Chinese trade envoy flying in to continue negotiations with the US, following several outbursts from President Trump who accused China of reneging on its promises.
 
While this trade drama drove investors into the safe-haven US dollar, the effect could be compounded later today when the latest US inflation stats are published, potentially causing further strength if Fed interest rate cut expectations fade.
 
 
Upcoming Data:
 
Friday, 10th May 2019
09:30 GBP UK Q1 GDP, Manufacturing & Industrial Production
09:30 GBP UK Construction Output
09:30 GBP UK Business Investment
13:30 USD US CPI Inflation (April)
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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