GBPUSD got under pressure due to the statistics, but could have decline much deeper.
The British Pound remains weak against the USD on Tuesday morning. The current quote for the instrument is 1.2866.
The preliminary report on the British GDP showed that the indicator added 1.3% y/y in the fourth quarter against the expected reading of +1.4% y/y. On QoQ, the GDP turned out to be very weak – only +0.2% against market expectations of +0.3%.
The components of the report look very unimpressive. The services output added 0.4% (vs 0.5 percent in the previous quarter), the construction sector only 0.3% after skyrocketing by 2.3% the quarter before. With great probability, it can be said that the British economy is “losing weight” out of fear in anticipation of the Brexit and due to complicated talks relating to it.
Everything is connected very simply and, thus, frightening investors even more: the Brexit complications at the end of 2018 resulted in outflows of investable funds, which is confirmed by the Office for National Statistics. As a rule, the construction sector is more sensitive to such things (one can see it in the numbers), as well as car manufacturing and metal production.
In other words, the actual reading of the GDP was the weakest since 2012. It’s quite strange that this fact didn’t make the Pound plummet.
The Industrial Production in the United Kingdom fell as well: -0.5% m/m and -0.9% y/y. Both readings are much worse than expected. Another negative report was the Manufacturing Production, which lost 0.7% m/m and 2.1% y/y. This is particularly bad, because it drag the GDP down as well.
All statistics that were published are negative for the Pound.
Later in the evening, the Bank of England Governor Mark Carney will speak, but he is very unlikely to say anything sensational.
Orgin: RoboForex
