FX traders had been awaiting the release of UK growth data to judge the likely timing of a rate hike from the Bank of England. Expectations were high that the data wouldn’t at least be flat, and not show any slippage. Unfortunately, according to the UK’s Office of National Statistics, GDP for Q3, albeit preliminary, slipped to 2.3% (year-over-year) from 2.4% in Q3 of 2014, That number fell just short of analysts’ expectations of flat growth at 2.4%. Quarter-over-quarter growth also declined, falling to 0.5% from 0.7%, against expectations of a drop to 0.6%. That pushed expectations of a rate hike farther back and is weighing on the Pound Sterling.
As reported at 9:52 am (GMT) in London, the GBP/USD was trading at $1.5330, down 0.12%; the pair ranged from $1.5319 at the low end to $1.5360 at the high. The EUR/GBP was up at 0.7206, a gain of 0.01% and just off the session trough.
US Data Could Offer Fed Guidance
Markets will be waiting on a slew of data from the US to help pinpoint the Fed’s rationale for the next rate hike. The Fed had said that data would be the likely driver of rate hike direction. Today, among the many data points, Durable Goods orders and Consumer Confidence could impact the Dollar’s sentiment. Analysts are currently forecasting a significant decline in September’s Durable Goods figure and a slight fall in Consumer Confidence. A surprise upside to either could provide the Dollar with a lift. Currently, the US Dollar Index is trading lower at 96.807 .DXY, a loss of 0.06%.