GBP: UK October GDP data disappoints – Scotiabank

UK activity data for October was soft. Monthly GDP fell 0.1%, versus expectations of a 0.1% rise, Scotiabank’s Chief FX Strategist Shaun Osborne notes.  

GBP eases broadly

“Manufacturing, construction and services outputs were weaker than forecast. The UK also posted a larger than forecast trade deficit in the month. However, the BoE/Ipsos inflation expectations survey firmed to 3.0% for the next 12 months, up from 2.7% in October. Sterling weakened broadly on the soft growth data, lifting EURGBP for a second day.”

“Cable is steadying in the mid-1.26s on the short-term chart after sliding in European trade. The pound’s drop out of its trading range around 1.2750 and a low close on the week is turning the technical picture a bit grimmer after the pound’s failure against the 200-day MA (1.2820) last week. A low close on the week will point to more losses ahead.”

“EUR/GBP’s rebound from the low 0.82 zone has abruptly curtailed the GBP’s bull run on the cross, meanwhile—at least for now. Better selling interest may re-emerge nearer the mid-0.83s.”