The British pound strengthened against the other major currencies in the early European session on Thursday, after data showed that the U.K. economy expanded more than previously estimated in the fourth quarter.
Data from the Office for National Statistics showed that U.K. Gross domestic product climbed 0.6 percent in the fourth quarter from prior three months, which was revised up from 0.5 percent estimated on February 25. This was the 12th consecutive quarter of positive growth since early 2013.
Likewise, annual growth was revised to 2.1 percent from 1.9 percent in the fourth quarter. In 2015, GDP grew by 2.3 percent instead of 2.2 percent estimated previously.
Another report from ONS showed that gross fixed capital formation fell 1.1 percent to GBP 76.6 billion in the fourth quarter. At the same time, business investment dropped 2 percent to GBP 43.3 billion.
In January, services output expanded 2.8 percent in January from prior year as all the main components of the services industries grew from same month a year ago. On a monthly basis, the index of services gained 0.2 percent in January.
In the fourth quarter, the current account deficit widened to GBP 32.7 billion from revised GBP 20.1 billion in the third quarter. The widening in the current account deficit was due to a widening in the deficits on primary income, total trade and secondary income.
In other economic news, data from GfK showed that consumer confidence in the United Kingdom was largely unchanged in March, with an index score of 0. That was unchanged from the February reading, and it beat forecasts for a score of -1.
In the Asian session today, the pound dropped against its major rivals.
In the early European session, the pound rose to 0.7888 against the euro and 1.4394 against the U.S. dollar from an early 1-week low of 0.7914 and a 2-day low of 1.4326, respectively. If the pound extends its uptrend, it is likely to find resistance around 0.77 against the euro and 1.46 against the greenback.
Against the yen and the Swiss franc, the pound edged up to 161.85 and 1.3863 from early 3-day lows of 160.89 and 1.3821, respectively. The pound may test resistance around 166.00 against the yen and 1.40 against the franc.
Looking ahead, U.S. Chicago PMI for March, U.S. weekly jobless claims for the week ended March 26 and Canada GDP data for January are to be announced in the New York session.
At 9:30 am ET, Federal Reserve Bank of Chicago President Charles Evans participates in discussion on current economic conditions and monetary policy before the Quinnipiac G.A.M.E. VI Forum, in New York.
At 12:30 pm ET, Swiss National Bank Governing Board Member Andrea Maechler will deliver speech titled “Investment Policy in Times of High Foreign Exchange Reserves” at the Swiss National Bank’s Money Market Event, in Zurich.
The material has been provided by InstaForex Company – www.instaforex.com