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Pound May Rise as 4Q UK GDP Data Boosts BOE Rate Hike Bets

Pound May Rise as 4Q UK GDP Data Boosts BOE Rate Hike Bets

Ilya Spivak, Head Strategist, APAC

Talking Points:

  • British Pound May Rise as Firm 4Q GDP Figures Boost BOE Rate Hike Bets
  • Australian Dollar Edges Higher on Swelling Risk Appetite in Overnight Trade
  • See Economic Releases Directly on Your Charts with the DailyFX News App

The preliminary set of fourth-quarter UK GDP figures headlines the economic calendar in European trading hours. The year-on-year economic growth rate is expected to rise to 2.8 percent, the highest since 2007. The quarter-on-quarter increase is seen registering at 0.6 percent, a print squarely in line with the near-term trend average.

UK economic news-flow has increasingly outperformed relative to consensus forecasts over recent months, suggesting analysts are underestimating the economy’s vigor and opening the door for an upside surprise. Such an outcome may fuel speculation that a Bank of England interest rate hike may come sooner than currently priced in, boosting the British Pound.

The Australian Dollar outperformed in overnight trade, rising as much as 0.2 percent on average against its leading counterparts. The advance tracked a move higher in Australia’s benchmark S&P/ASX 200 stock index, pointing to swelling risk appetite as the catalyst behind upside momentum.

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Asia Session

GMTCCYEVENTACTEXPPREV
23:50JPYPPI Services (YoY) (DEC)3.6%3.5%3.6%
0:30AUDNAB Business Confidence (DEC)2-1
0:30AUDNAB Business Conditions (DEC)4-5
1:30CNYIndustrial Profits (YoY) (DEC)-8.0%--4.2%
5:00JPYSmall Business Confidence (JAN)-46.7

European Session

GMTCCYEVENTEXPPREVIMPACT
9:30GBPIndex of Services (MoM) (NOV)0.3%0.3%Low
9:30GBPIndex of Services (3M/3M) (NOV)0.9%0.7%Low
9:30GBPGDP (QoQ) (4Q A)0.6%0.7%High
9:30GBPGDP (YoY) (4Q A)2.8%2.6%High
9:30GBPBBA Loans for House Purchase (DEC)3650036717Low

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3
EURUSD1.08151.10131.11261.12111.13241.14091.1607
GBPUSD1.47731.49111.49941.50491.51321.51871.5325

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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