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.