The GBP/USD continues growing, but the purchases volumes are reducing.
It looks like the growth potential in the GBP/USD pair has its limits after all: it’s not easy to move through the brexit and wait for new fluctuations over and over again. The current quote for the pair is 1.3446.
According to the statistics published today, the united Kingdom’s GDP over the first quarter increased by 0.4%; it’s the final number and it matched the predicted one. On a year-on-year basis, the British economy expanded by 2.0% against 1.8% in the fourth quarter of 2015. The components of the report show that the economy is being pulled upwards by consumer spendings: the indicator didn’t manage to grow for a long time. In the first quarter of 2016, consumer spendings increase was the fastest over the previous 12 months. This partially smoothed the consequences of drawdown of export parameters and business investments.
Over the first quarter, the trade deficit of the country decreased as well. The indicator is 6.9% of the GDP against 7.2% in the previous quarter. This is a good signal, which shows that indicator stabilized at the beginning of the year. The statistics over the second quarter will also be neutral, but the third quarter is expected with the decline due to the brexit consequences.
The market is full of speculations that the British economy may return to the recession for the first time since 2008 – not now, but some time later. The second reason for speculation is the potential of the interest rate decline in the mid-term. If this is really possible, the British regulator, I mean the Bank of England, will think about it in advance and use this mechanism preventively. This news is bad for the Pound.
RoboForex Analytical Department
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