25 Oct 2013
GBP/USD: Sterling struggles to make gains despite robust GDP numbers
FXstreet.com (London) - GDP numbers released by the Office for National Statistics this morning showed that the UK economy expanded by 0.8 percent in the third quarter. The acceleration I growth was the fastest in three years. Growth was dragged by weak electricity and gas output.
UK construction data was up 2.5 percent for the quarter continuing to recover from mixed performance. House builders have been boosted by the government’s Help to Buy scheme, with government underwriting of mortgages.
The service sector grew by 0.7 percent, and is not 0.5 percent above its pre-2008 levels.
GBP/USD climbed to USD1.6420 but has sold off to USD1.6194, slightly below the open, down 0.04 percent.
Some pressure has come from caution about future UK performance, with the continuing fall in real wages posing a threat to UK consumption. Inflation continues to outstrip wage rises. The UK also faces headwinds from weak Eurozone growth.
With positive macro numbers becoming normalised, sterling may struggle to make further gains through the next quarter, with any GDP/USP upside pressure coming from weak dollar prospects.
The prospect of continued Federal Reserve ultra-loose policies have weighed on the Greenback. Weak jobs number have helped to push expectations of any tapering of the Fed’s monthly USD85bn of asset purchases well into 2014 – past the next debt ceiling and the end of Ben Bernanke’s second term as Chairman of the central bank.
UK construction data was up 2.5 percent for the quarter continuing to recover from mixed performance. House builders have been boosted by the government’s Help to Buy scheme, with government underwriting of mortgages.
The service sector grew by 0.7 percent, and is not 0.5 percent above its pre-2008 levels.
GBP/USD climbed to USD1.6420 but has sold off to USD1.6194, slightly below the open, down 0.04 percent.
Some pressure has come from caution about future UK performance, with the continuing fall in real wages posing a threat to UK consumption. Inflation continues to outstrip wage rises. The UK also faces headwinds from weak Eurozone growth.
With positive macro numbers becoming normalised, sterling may struggle to make further gains through the next quarter, with any GDP/USP upside pressure coming from weak dollar prospects.
The prospect of continued Federal Reserve ultra-loose policies have weighed on the Greenback. Weak jobs number have helped to push expectations of any tapering of the Fed’s monthly USD85bn of asset purchases well into 2014 – past the next debt ceiling and the end of Ben Bernanke’s second term as Chairman of the central bank.