British Pound Sterling | Currency News Views and Outlook
British Pound Sterling: Currency looks to recover vs AUD and EUR, UK GDP data will continue to pressure sterling
- Details
- Category: British Pound Sterling
- Published on Wednesday, 25 January 2012 10:28
- Written by Sam Coventry
UK GDP contracts at faster than expected pace - quantitative easing will be inevitable.
British Pound Sterling (GBP) in US Dollar (USD): GBPUSD is 0.27% lower on yesterday's close at 1.5577.
British Pound Sterling (GBP) in Euro (EUR): GBPEUR is 0.04% higher at 1.1992.
British Pound Sterling (GBP) in Australian Dollar (AUD): GBPAUD is 0.24% lower at 1.4864.
The British pound has realised some strength against the likes of the euro and Australian dollar since the European session got underway. Lower equity and commodity markets will be providing the support.
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The US dollar is the big winner this morning, this in line with weaker markets and today's announcement from the US Federal Reserve.
It was revealed that UK GDP growth contracted at an 0.2% quarterly rate in the fourth quarter, according to the latest data out this morning from the Office for National Statistics (ONS).
A shrinking economy will push the hand of the Bank of England to print yet more money to try and prop up the UK economy. This will continue to limit and significant advances for the British pound.
The Bank of England minutes are also due today.
Gareth Berry at UBS comments:
"Although we expect them to reveal a unanimous decision to leave both rates and the asset purchase program unchanged, there may be some subtle hints regarding future QE from the BoE.
"The current program is due to finish in February and we expect further purchases to be announced in due course. On Tuesday BoE Governor King, speaking from Brighton, held out the possibility of more asset purchases 'if needed'."
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