Pound Firms On Better Than Expected U.K. GDP Data
09 September 2019 - 5:17PM
RTTF2
The pound spiked up against its major counterparts in the
European session on Monday, as a data showed that nation's economy
expanded more than estimated in July, reducing fears over a
recession in the U.K.
Figures from the Office for National Statistics showed that
gross domestic product expanded 0.3 percent in July after staying
flat in June. Economists had forecast marginal growth of 0.1
percent.
GDP was flat in the three months to July from the previous three
months, following a contraction of 0.2 percent in the second
quarter.
Another report from ONS showed that the visible trade deficit
widened to GBP 9.14 billion from GBP 8.9 billion in June. Trade in
services showed a surplus of GBP 8.9 billion compared to a GBP 8.78
billion surplus a month ago.
The total trade balance showed a shortfall of GBP 219 million
compared to a deficit of GBP 132 million in June.
European stocks were trading mixed after data showed that
China's exports fell unexpectedly in August amid escalating trade
dispute with the U.S. administration.
Hopes of further stimulus from global central banks helped to
limit the downside to some extent ahead of a European Central Bank
meeting slated for Thursday.
The currency held steady against its major counterparts in the
previous session, excepting the euro.
The pound strengthened to 1.2320 against the greenback, from a
4-day low of 1.2233 hit at 3:15 am ET. On the upside, 1.27 is
likely seen as the next resistance level for the pound.
After a 4-day decline to 130.81 at 3:15 am ET, the pound
reversed direction, touching as high as 131.80 against the yen. The
pound is likely to find resistance around the 134.00 level, should
it rises further.
The pound firmed to 1.2229 against the franc, its highest since
July 29. This followed a 4-day low of 1.2109 it recorded at 3:15 am
ET. The next possible resistance for the pound is seen around the
1.25 level.
Data from the State Secretariat for Economic Affairs showed that
Switzerland's jobless rate remained stable in August.
The unemployment rate remained unchanged at seasonally adjusted
2.3 percent in August. On an unadjusted basis, the jobless rate
held steady at 2.1 percent.
The pound climbed to a 1-1/2-month high of 0.8936 against the
euro, after falling to a 4-day low of 0.9015 at 3:15 am ET. The
pound is poised to find resistance around the 0.88 level.
Data from Destatis showed that Germany's exports increased in
July, while imports decreased from the previous month.
Exports advanced 0.7 percent month-on-month in July, reversing a
0.1 percent fall in June. Meanwhile, imports dropped 1.5 percent
after rising 0.7 percent a month ago.
Looking ahead, U.S. consumer credit for July is scheduled for
release in the New York session.
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