British Pound Vulnerable to Downbeat UK GDP Revision
- British Pound may fall as UK Q1 GDP revision disappoints
- Japanese Yen down as Asian markets’ risk appetite improves
- Euro extends rally triggered after German 10-year bond sale
A revised set of first-quarter UK GDP figures headlines the economic calendar in European trading hours. The release is expected to confirm that output added 0.3 percent in the first three months of the year, putting the trend growth rate at a two-year high of 2.1 percent.
Surprise risk seems asymmetrically skewed against the British Pound. An upgrade is unlikely to offer lasting support considering the BOE’s Brexit-inspired dovish posture. On the other hand, a downward revision would dovetail with policymakers’ disposition and may hurt the currency amid easing speculation.
As it happens, recent UK news-flow warns of disappointment. Realized outcomes have increasingly deteriorated relative to consensus forecasts over the past three months, hinting that analysts’ models are overestimating the economy’s vigor.
The Yen underperformed in Asian trade as regional shares followed Wall Street higher, sapping demand for the perennially anti-risk Japanese unit. The Euro outperformed building on gains scored in the prior session. That move tracked a pickup in benchmark German yields after a 10-year bond auction.
** All times listed in GMT. See the full DailyFX economic calendar here.
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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