The GBP received an update yesterday morning. The employment report has great potential to move GBP pairs and it succeeded. The earnings remained unchanged while the unemployment rate went up a decimal point.
The decline of the GBP and the GBP/USD began early this morning and lost about 100 pips. However, it went back up later in the afternoon as the USD lost some ground after the FOMC meeting minutes.
Since the FED members appeared hawkish on economic growth and on the rise of the rates this year, what just happened with the GBP/USD was odd. It’s not a big surprise that this has been the fate of the Dollar for more than a year now.
The UK GDP
At 9:30 GMT today, the UK GDP report will be published. Since earnings remain unchanged, this report is even more important for the GBP than wages.
This is the second estimate for the Q4 of 2017. It is expected to remain unchanged at 0.5% like the previous reading. That would be slightly better for the GBP since the market expects the UK economy to have difficulties due to Brexit.
Busines investments are included in this report as well. It shows how businesses respond to the future of the economy and is a leading indicator which forex traders love. We must keep an eye on that component of the employment report as well.
I expect the GBP to rally if both indicators are positive but not for too long as Brexit is underway and the GBP/USD is currently trading considerably high. Grab what you can and call it a day.
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