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Strong NIESR GDP Estimate Boosts Pound Following Post-BoE Sell-off

Strong NIESR GDP Estimate Boosts Pound Following Post-BoE Sell-off

2013-05-09 15:00:00
Christopher Vecchio, CFA, Sr. Currency Strategist

THE TAKEAWAY: GBP NIESR GDP Estimate (APR) > +0.8% from +0.3% (revised from +0.1%) > GBPUSD BULLISH

Data has been light across the globe this week, but this Thursday has already seen the Bank of England Rate Decision stoke a modest rally in the British Pound. However, with little indication that anything at all would be coming from the BoE before Mark Carney arrives to takeover the governorship in July, the Sterling began a free fall that spanned 100-pips in just two hours.

The GBPUSD tumble was put on hold, however, at 10:00 EST/14:00 GMT, when the National Institute of Economic and Social Research (NIESR) released its April forecast for UK growth. The report was much more bullish than anticipated, with the three months ending in April growing by +0.8%, according to NIESR. April’s strong signal easily outperformed the initial and revised March readings of +0.1% and +0.3%, respectively. Overall, the British Pound has endured a streak of better than expected news since early-March, highlighted by the better than expected 1Q’13 GDP report released on April 25.

GBPUSD 1-min Chart: May 9, 2013

Strong_NIESR_GDP_Estimate_Boosts_Pound_Following_Post-BoE_Sell-off_body_x0000_i1027.png, Strong NIESR GDP Estimate Boosts Pound Following Post-BoE Sell-off

Charts Created using Marketscopeprepared by Christopher Vecchio

Following the release, the GBPUSD climbed from 1.5493 to 1.5514, before falling back to 1.5506, at the time this report was written. The GBPUSD has fallen from a session high of 1.5587 to as low as 1.5485 today.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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