The UK Q4 Gross Domestic Product (GDP) data (first estimate) released today came in beyond the expected 1.4% annual growth figure, reaching 1.5%. The positive figures helped strengthen Sterling further against its key currency pairings from gains it had already made overnight and early this morning.
David Johnson, founding director of currency specialist, Halo Financial
, comments on today’s GDP figures.
“The Pound continued to strengthen this morning after news that UK economic growth beat market forecasts in Q4. Traders had been expecting data showing a fall in the pace of UK GDP growth in the three months to December 2017. Whilst the growth rate did come down from 1.7% in Q3, the fall was not as sharp as their own forecasts. At 1.5%, the first estimate of GDP growth was above the 1.4% forecast and Sterling, which has been strengthening throughout the week, pushed a little higher.
“The Pound is now above $1.42 and above €1.14. It has also gained against a raft of other currencies
, including the Australian and New Zealand Dollars, the Japanese Yen and the Canadian Dollar.
“The caveat to this better than expected result is that this is just the first estimate, based on less than 50% of the entire dataset. So there is plenty of scope for revision when the second estimate is published next month. For the time being, though, this is good news for the UK and good news for the recovering Pound.
“It is not as good news for UK exporters
, but the UK government will be glad of the strength in the Pound, which will bring down inflation.”