The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Pound drops despite good GDP figures
The pound initially jumped versus the US dollar after the UK revealed growth figures that were in line with expectations, but the gains were short-lived.
The pound is trading at £1.6968, down 0.1% on the day as it turns out that restoring growth to the pre-crisis level is not good enough for traders. In the second quarter of this year, the British economy grew at a rate of 0.8%, meeting analyst’s estimates; since the announcement, sterling made a move towards $1.7 but quickly reversed.
The pound has been under pressure versus the US dollar for the past 24 hours. Yesterday sterling slid despite soft manufacturing and housing numbers from the US, but the pound is at a one-month low and this could provide a buying opportunity.
The US will release durable goods figures at 1.30pm (London time). A disappointing report could help the pound. Sterling is receiving support at $1.6894, with a short-term target of $1.7080.