Poor GBP data hurts Sterling
Sterling weakened on Thursday after news that Britain’s economy grew by a slower-than-expected 1.1% between August and September, a pace that leaves the UK lagging behind other rich nations attempting to recover from the coronavirus pandemic.
The reading that was below market expectations weighed on the pounds recent rally and will provide a reality check for the market and will highlight the importance of striking a trade deal with the EU by year end.
The pound was down by 0.6% against the dollar at $1.3139 and by 0.9% against the euro, last trading at 1.1120.
Chancellor of the Exchequer Rishi Sunak announced yesterday that he is planning a range of measures to get people “out and about” and spending again after England’s second coronavirus lockdown hopefully come to end. Ministers are looking at ways to encourage consumers back into shops, bars and restaurants when restrictions are expected to ease on Dec. 2. Too try and boost the ailing economy. This could include the eat out to help scheme previously used after the first lockdown but Sunak would not confirm.
The U.K. economy expanded the most on record in the third quarter, data released yesterday showed, with output surging 15.5% in the three months through September. But the rebound still leaves Britain’s recovery trailing behind the world’s major industrialized nations, with the economy almost 10% smaller than before the pandemic.
In the US, weekly jobless claims report did not move the dollar when it came out on Thursday morning. The report showed the pace of decline in claims had slowed to 709,000 compared with 757,000 the prior week and forecasts for 735,000 claims.
U.S. stocks fell, with the S&P 500 dropping about 0.5% in early New York trading.
US Core CPI & PPI- M/M- 2.30PM
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