Strong September NIESR GDP Estimate Fails to Impress British Pound
One European economy is growing at an increasing rate: the United Kingdom. At least, that’s what the National Institute of Economic and Social Research’s September growth estimate showed today, which ticked up to +0.8% quarter-over-quarter from +0.1% q/q in August (quarterly here denotes trailing three-months ending in reporting month; this report estimated growth for July-August-September). For context, this is the single highest NIESR GDP estimate seen since July 2010 (+1.2% q/q). For a calendar quarter, this is the highest reading since the third quarter of 2007.
However, while the headline reading looks great, it is important to consider some one-off occurrences that took place in the middle of the year: the Queen’s Jubilee celebration as well as the London Olympics. These events undoubtedly provided a boost to growth: Bloomberg News suggests that a better guess for growth would be +0.2% or +0.3% q/q.
GBPUSD 1-minute Chart: October 9, 2012
Charts Created using Marketscope – Prepared by Christopher Vecchio
Accordingly, reaction to the release can be described as tepid at best, with the GBPUSD inching high for a few pips before falling back. The GBPUSD traded at 1.6010 before the release, and was at 1.6014 at the time this report was written.
--- Written by Christopher Vecchio, Currency Analyst
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