GBP/USD rises after the UK GDP accelerates above expectations on the upside
- Sterling rose to almost $1.4300 as UK GDP beats expectations, crawling back up following Trump induced dive
- UK Q4 GDP rises 0.4% Q/Q and remains at 1.7% y/y
The GBP/USD clawed its way back during the European market session supported by the UK fourth-quarter GDP that rose 0.4% over the quarter while increasing 1.7% over the year, beating the market expectations of deceleration towards 1.4% y/y.
The GBP/USD is still pushing to erase the losses made by Trump’s comments, trading up 1% at around $1.4280.
The UK Q4 GDP showed the economy growing 0.4% over the previous quarter while increasing 1.7% compared with the final quarter of last year.
Later this afternoon at 13:30 GMT, preliminary US GDP growth is also seen decelerating to 3.0% annualized rate.
Sterling took a dive yesterday following Dollar-boosting remarks from President Trump, saying that he “ultimately” wants a strong dollar, in an attempt to walk back comments by Secretary of the Treasury Steven Mnuchin at the World Economic Forum in Davos. Mnuchin stated earlier this week that a weak US Dollar is desirable, as it helps to boost US trade.
President Trump took back Mnuchin’s comments, stating that his words were “misinterpreted” by markets, following scathing remarks from both Mario Draghi, President of the European Central Bank (ECB), and Christine Lagarde, Managing Director of the International Monetary Fund (IMF). Both Draghi and Lagarde reminded Mnuchin through public statements that his words violate the pact between IMF members to not engage in verbally devaluing global currencies.