The Pound Sterling Live - The Heart-Beat of the British Pound

British Pound Sterling Live on Friday: GDP numbers shock - GBP plummets vs EUR, AUD and USD

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Category: The Pound Sterling Live - The Heart-Beat of The British Pound

Published on Friday, 25 January 2013 09:26

Written by Will Peters

15:30: Sterling to be exposed to latent selling pressure

When will the sterling sell-off cease? Hard to call, but UniCredit are forecasting latent selling pressure in the wake of the recent GBP sale. What is more, the Italian bank believes Cameron has not aided GBP with his Euro referendum offer:  

"The reason Prime Minister Cameron's remarks on the relationship between the UK and the EU didn’t cause more damage to sterling were the less dovish MPC minutes. Nevertheless, he clearly did the local currency a disservice, which may have larger repercussions on both cable and EUR-GBP. Given our assumption of a stronger euro almost across the board EUR- GBP may even have the potential to at least settle at around 0.85 next week."

12:12: Sterling stabilises after initial GDP shock

It appears currency markets got ahead of themselves on the release of the UK's Q4 2012 GDP data.

Sterling slumped but has now rebounded:

Pound / Euro = 0.4 pct down at 1.1759.

Pound / US dollar = 0.06 pct higher at 1.5801.

Pound / Australian dollar = 0.2 pct higher at 1.5139.
Please be aware that these are wholesale market rates. Your bank will add a spread to your retail rate. We suggest contacting an independent FX provider who will guarantee to undercut your banks offer, thus delivering you more foreign currency. More on this here.

10:15: GBP being 'slaughtered'

Glenn Uniacke, Head of Options at the forex specialist Moneycorp said:

"Sterling is being slaughtered - and has already fallen below last year's low against the euro. The tanking pound is curiously at odds with the soaring stock market, but that will be of little comfort to struggling importers."

9:31: YIKES! Sterling in free-fall

Pound sterling has reacted negatively to the GDP release issued this morning.

We had been expecting no reaction. How wrong we were.

UK GDP fell 0.3 pct in Q4. A big miss on analyst forecasts for a 0.1 pct drop.

GBP/EUR = 0.56 pct down at 1.1738.

GBP/USD = 0.2 pct in the red at 1.5761.

GBP/AUD = 0.16 pct down at 1.5086.

Expect high volatility through the morning.

9:20: Further losses vs EUR, data awaited

The pound sterling's (Currency:GBP) first test of the day will be the release of GDP numbers at 9:30.

What recent price action has been telling us though is that economic data releases are of little interest to market players. As we mentioned yesterday, markets are shifting out of the safe-haven GBP as the global market improves.

Indeed, we would expect little reaction from sterling.

A look at the spot currency rates shows:

The pound euro exchange rate is 0.35 pct lower on last night's closing level. GPB/EUR is at 1.1763.

The pound dollar exchange rate is 0.09 pct higher at 1.5804.

The pound Australian dollar exchange rate is 0.11 pct up at 1.5126.

Please be aware that these are wholesale market rates. Your bank will add a spread to your retail rate. We suggest contacting an independent FX provider who will guarantee to undercut your banks offer, thus delivering you more foreign currency. More on this here.