Pound Declines on an Estimate for Slower GDP Growth
- NIESR predicts slower growth in 3-months ending in October
- BoE said rates reliant on employment improvement
- GBP/USD falls below 1.6100
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The pace of UK gross domestic product growth declined slightly in the three months ending in October, according to the monthly estimate release by the National Institute of Economic & Social Research. Three-month GDP growth was estimated at 0.7% for October, which was lower than the official 0.8% economic growth reported for the third quarter ending with September.
The NIESR release comes one day ahead of the Bank of England rate decision, and the central bank said last month that it will keep interest rates at a record low for the foreseeable future, despite signs of a strengthening economy. Furthermore, the UK PMI indicated that economic activity in the services sector accelerated at the fastest pace in 16 years in October. The BoE has said it will not raise interest rates until unemployment falls to 7%, meaning worse economic releases are Pound negative.
That is why the Pound declined 20 pips and below 1.6100 against the US Dollar following the release. GBP/USD may next see support by the key 1.6000 figure, and a 10-month high at 1.6260 may provide resistance.
GBP/USD 1-Minute: November 6, 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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