News Column

Pound Climbs As UK Q2 GDP Data Meets Forecast

August 15, 2014

BRUSSELS (Alliance News) - The pound strengthened against the other major currencies in the early European session on Friday after data showed that the UK economy grew as initially estimated in the second quarter.

Data from the Office for National Statistics showed that the gross domestic product grew 0.8% in second quarter sequentially, the same rate as seen in the first quarter, and in line with preliminary estimate. Meanwhile, the annual growth was revised up to 3.2% from 3.1%.

Services output increased 0.3% in June from May, the third consecutive 0.3% increase, another report from ONS showed today. On a yearly basis, the index of services advanced 3.6% in June.

In the second quarter, services output climbed 1% from the prior quarter, unchanged from the previous estimate published on July 25.

The pound advanced to a 2-day high of 1.6698 against the US dollar, from an early low of 1.6675. If the pound extends its uptrend, it is likely to find resistance around the 1.68 area.

Against the yen, the pound edged up to 171.19 from an early low of 170.91. The pound may test resistance near the 173.30 region.

The pound rose slightly to 0.8015 against the euro. At yesterday's close, the pound was trading at 0.8007 against the euro. Continuation of bullish trend may lead the pound to a resistance around the 0.79 mark.

Moving away from an early low of 1.5097 against the Swiss franc, the pound slightly rose to 1.5112. The pair closed yesterday's deals at 1.5124 against the franc. On the upside, 1.53 is seen as next resistance level for the pound.

Looking ahead, US producer price index and industrial production for July are due to be released in the New York session.

At 9:55 am ET, US Reuters/University of Michigan's final consumer sentiment index for August is due to be released.

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Source: Alliance News

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