Pound May Rise as UK GDP Downturn Portends Softer Brexit Rhetoric

Talking Points:

  • UK GDP total competence matter some-more for domestic vs BOE outlook
  • Downturn competence move softer Brexit posture, boosting a Pound
  • Soft US GDP information competence cold Fed rate travel bets, harm US Dollar

First-quarter UK GDP total title a mercantile calendar in European trade hours. Output is approaching to have combined 0.4 percent, imprinting a slowest three-month opening in a year. A slight pickup to 2.2 from 1.9 percent in a on-year expansion rate will keep it resolutely in line with a normal trend range. While it positively could be worse, that frequency seems like something to be vehement about.

UK mercantile news-flow began to dramatically mellow relations to accord forecasts in mid-February. This hints that a models generating analysts’ projections are proof overly flushed and opens a doorway for serve disappointment. Strangely enough, that competence indeed be interpreted as a certain expansion for a British Pound.

The BOE has resolutely determined a “dovish hold” position, so a GDP imitation will do small to change baseline process bets. However, if a cooling effects of Brexit uncertainly are finally emerging, a supervision of Prime Minister Theresa May competence be forced to assuage a tinge vis-à-vis a EU lest a devise of securing a larger charge in a Jun choosing backfires. This competence ease jumpy investors.

The spotlight afterwards turns to an equivalent US GDP report. The annualized expansion rate is approaching to tumble from 2.1 to 1 percent. The Atlanta Fed’s GDPNow model, closely-watched foresee updated with incoming mercantile data, has traders disturbed about an even some-more gloomy result. A fibre of information disappointments over a past 6 weeks is also ominous. A soothing imitation competence cold Fed rate travel bets, spiteful a US Dollar.

Retail traders are positioned for British Pound weakness. Find out here what that hints about a entrance cost trend!

Asia Session

Pound May Rise as UK GDP Downturn Portends Softer Brexit Rhetoric

European Session

Pound May Rise as UK GDP Downturn Portends Softer Brexit Rhetoric

** All times listed in GMT. See a full DailyFX mercantile calendar here.

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

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