UK GDP expected to rise, USD investors await rebound in goods orders

Philip McHugh December 22nd 2017 - 2 minute read

  • UK to publish final reading for Q3 GDP
  • US goods orders predicted to rally
  • USD forecast to stumble following housing figures

UK GDP to confirm third quarter growth

The pound may strengthen later this morning as the UK publishes its final GDP reading for the third quarter.

Economists expected the data to confirm that the UK’s economic growth rose from 0.3% to 0.4% in the three months to September.

The uptick in growth is expected to be supported by robust consumer consumption as car sales recovered after a weak second quarter.

However the accompanying business investment data could temper any possible advance by GBP this morning as analyst forecast that the final reading will confirm that investment growth slowed from 0.5% to 0.2% in the previous quarter, with Brexit uncertainty likely be the main cause for the decline.

US durable goods orders expected to rebound in November

USD is expected to rally later this afternoon following the release of the latest US durable goods orders figures as analysts predict that orders will have rebounded last month.

Order growth is currently forecast to have rallied to 2% in November after slumping -1.5% in October after a significant drop in orders for transport equipment and aircraft parts as a contract for Boeing aircraft came to an end.

A jump to 2% would also place figures above the long-term average and help to support another strong quarter of growth in the US economy.

However, durable goods orders are notoriously fickle and November could easily see orders decline for a second consecutive month, something that will likely weaken the US dollar.

Drop in US new home sales to pressure USD

Any gains for the US dollar on the back of the durable goods orders figures could be quickly trimmed later in the afternoon as the US also publishes its latest housing data.

Economists forecast that US new home sales will have slipped from 685,000 to 654,000 in November, a decline of -4.7%, with consumers likely to have held off on making a house purchase last month ahead of the Federal Reserve’s rate hike in December.

However, given sales in October were expected to have slumped -6.3% rather than appreciate by 6.2%, the US dollar may find itself being supported by another surprise jump in sales this month.

Upcoming Data

Friday, 22nd December, 2017

09:30               GBP GDP Q3
09:30               GBP Business Investment Q3
13:30               CAD GDP Nov
13:30               USD Durable Goods Orders Nov      
15:00               USD New Home Sales Nov

Written by
Philip McHugh

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