GBP Edges Higher After UK GDP Estimate Miss
- UK NIESR GDP Estimate for July beat expectations,.
- Data is in-line with recent PMI readings showing a potential slowdown post-Brexit.
-GBP/USD little changed on the news.
The National Institute of Economic and Social Research released its July estimate for UK GDP at 0.3% versus 0.4% expected and a previous read of 0.6%. The estimate is generally perceived as a fairly accurate read of growth, as UK ‘actual’ GDP grew at 0.6% in Q2 2016.
This report seems to agree with recent PMI readings that suggest a slowdown is brewing in the UK economy in the aftermath of the Brexit referendum. The UK Manufacturing PMI dipped into contraction-territory in July to 48.2, from 52.4 in June, which would be the the lowest print for UK PMI since 2013. The UK Flash Services PMI fell to 47.4 in July from 52.3 in June, marking the first contraction since December 2012 and the strongest rate of decline since March 2009.
Following the data, the Pound tilted higher against the US Dollar, with GBP/USD immediately fell and then rose to as high as $1.29894 from $1.29619. By the time this report was written, the pair had settled near $1.29924. With FX volatility edging higher again, it’s the right time to review risk management principles to protect your capital.
--- Written by Omar Habib, DailyFX
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