UK GDP downgrade expected today
27 October, 2015
Rob Bastin
After a turbulent finish to last week, this week began with a much expected breather as rates consolidated within small ranges ahead of further key announcements that lie ahead. Both GBP/EUR and GBP/USD traded within a half a cent range with an absence of important UK data to cause any larger movements.
There were a few small releases throughout the day to review, UK mortgage approvals dropped slightly in September and Industrial Orders also took a hit last month. US New Home Sales missed expectations in the afternoon at 0.468Mnew homes on September, compared to a forecast of 0.550M, and another drop from the previous month. The USD did take a small hit in the afternoon after this release although remains in a strong position.
Today poses the first risk for Sterling with the revised GDP figures for Q3. With a slowdown in growth being a global concern, the UK figures are also expected to be downgraded with just 0.6% growth in Q3 compared to 0.7% previously. With GBP/EUR rates the highest in 2 months and with the US Dollar coming back into strength, it is difficult to see where any further gains could come from if these figures are confirmed at 9:30am.
The afternoon will also provide a couple of US announcements, namely Durable Goods orders at 12:30pm, Services PMI at 1:45pm and finally Consumer Confidence at 2:00pm. Positive figures are expected across all of these releases and if confirmed could see the Dollar’s rally continue ahead of their interest rate decision tomorrow night.
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