Q1 GDP Disappoints But Q4 2017 Revisions Take GBP/USD Closer To 1.30
Skerdian Meta • 1 min read
The UK GDP numbers for Q1 2017 were released a while ago and they showed that the British economy is starting to feel the impact Brexit for real, even though Brexit hasn´t begun yet.
The economy only grew by 0.3% compared to the 0.4% expected, which should have sent the GBP tumbling but in fact, it rose.
This last tumble in UK GDP figures is likely to break into a trend
The reason for this was the revision of last quarter´s numbers. Q4 2016 GDP ticked up another point higher to 0.7%. That´s good for 2016 but last year is already history so the 50 pip jump looks more like a relief rally, given that the Q1 2017 number wasn´t any worse.
I think the forex market was expecting a worse number, but 0.3% is pretty bad, in my honest opinion. The slower growth came mostly from weaker services which are a big factor for the UK economy, so that´s another negative element from this GDP report.
Yet, the GBP ended up slightly higher after the relief rally. But, I still think that selling near 1.30 is a good opportunity to make some pips, a few hundred actually.
As always, there are two sides of the story in any forex pair, and the USD GDP report is to be released shortly. The last US GDP report was revised 2 points higher, but there was no reaction in the USD pairs.
So, if you are going short this forex pair, you better wait for the US Q1 GDP report before pulling the trigger because the risk is too great right now if the US GDP numbers disappoint.