UK’s GDP could support GBP – UOB

FX Strategist at UOB Group Peter Chia sees the today’s UK GDP figures carrying the potential to ‘wake up’ the Sterling.

Key Quotes

“GBP/USD outperformed in G10 and reversed losses from the prior session. Though positioned for a short term upside move via options, prices remain constrained in the wider 1.2100/1.2335 range”.

“Today, key focus would be on UK’s advance 3Q GDP, with the UK economy expected to slow to 0.3% q/q in 3Q, from 0.7% in 2Q, with the y/y unchanged at 2.1%. This would be above official BOE forecasts and may put off the need to cut rates at next week’s policy meeting. We look for this event to possibly wake GBP/USD up from its sleepy 2-wk consolidation between 1.2100 and 1.2335”.