The British pound strengthened against the other major currencies in the European session on Wednesday, as the U.K. economy expanded matching the initial estimate in the second quarter and the current account deficit narrowed.
Data from the Office for National Statistics showed gross domestic product grew 0.7 percent from the first quarter, unrevised from the second estimate published on August 28. It was faster than the 0.4 percent expansion seen in the first quarter.
On a yearly basis, GDP gained 2.4 percent, revised down from 2.6 percent estimated previously.
Another report from ONS showed that the U.K. current account deficit narrowed to GBP 16.8 billion in the second quarter, from a revised deficit of GBP 24.0 billion in the prior quarter.
The index of services climbed 2.8 percent on a yearly basis as all the four main components increased from the same month a year ago. Output grew 0.2 percent from June, when it was up 0.6 percent.
Growth in services output for the second quarter was revised to 0.6 percent from 0.7 percent.
Gross fixed capital formation rose by GBP 0.8 billion or 1 percent from the prior quarter. Investment totaled GBP 76.3 billion, the highest since the fourth quarter of 2007.
Meanwhile, the European shares rose, as the automakers were boosted by a Chinese tax cut on small cars.
Traders focus on Federal Reserve Chair Janet Yellen’s speech at a conference later today.
In the Asian session today, the pound held steady against the other major currencies.
In the European trading, the pound rose to 2-day highs of 182.76 against the yen and 1.4792 against the Swiss franc, from early lows of 181.28 and 1.4708, respectively. If the pound extends its uptrend, it is likely to find resistance around 185.00 against the yen and 1.50 against the franc.
Against the U.S. dollar and the euro, the pound advanced to 1.5194 and 0.7385 from early lows of 1.5131 and 0.7430, respectively. On the upside, 1.53 against the greenback and 0.72 against the euro are seen as the next resistance levels for the pound.
Looking ahead, U.S. private sector jobs data for September, U.S. weekly crude oil inventories report for the week ended September 25 and U.S. Chicago PMI for September and Canada GDP data for July are set to be announced in the New York session.
At 8:00 am ET, Federal Reserve Bank of New York President William Dudley is expected to speak at the Securities Industry and Financial Markets Association’s Liquidity Forum, in New York.
Subsequently, Federal Reserve Chair Janet Yellen will deliver opening remarks at the Federal Reserves’ annual community banking conference, in St. Louis at 3:00 pm ET.
The material has been provided by InstaForex Company – www.instaforex.com