Pound Pops on an Upward Revision of UK GDP
THE TAKEAWAY: UK economic expansion revised higher to 0.7% -> UK exports rise 3.6% -> Cable pops following the release
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The Pound saw a tame bounce after the UK gross domestic product in the second quarter was revised higher in a second preliminary estimate.
UK GDP is now estimated to have risen 0.7% on a quarterly basis, better than the previous estimate for 0.6% GDP growth and the 0.3% economic expansion seen in the first quarter. The UK Office for National Statistics now approximates that GDP expanded 1.5% from Q2 of 2012, up from a previous estimate of 1.4%.
Exports were reported significantly higher in the second quarter, rising 3.6% on a quarterly basis, as imports also beat estimates by rising 2.5%. Private consumption rose an expected 0.4% in the second quarter, while government spending beat expectations for no change in spending, by rising 0.9% over the first quarter.
The UK Treasury reported that the economy is showing balanced growth and is on the right track, and specifically mentioned export and investment as encouraging. The Bank of England doesn’t give growth forecasts, but the central bank predicted muted growth in the first half of 2013. The BoE recently connected interest rates to the unemployment rate in a monthly report, therefore improved economic indicators are Pound positive.
The Pound is trading above 1.5600 against the US Dollar at the time of this writing, and a two-month high set recently at 1.5717 may provide resistance. The broken resistance level near 1.5600 may now see support for the pair.
GBPUSD Daily: August 23, 2013
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .
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