Forex: GBP/USD weakens despite encouraging UK GDP
_iNVEZZ.com Thursday July 25th:_ Sterling has continued its downward movements against the US dollar in today’s European trading, with the pair falling to a two-day low at 1.5261, decreasing 123 pips so far intraday, notwithstanding encouraging signs of economic growth in the UK.
The preliminary reading of the UK’s GDP for the second quarter of the year was released at 09:30 BST today, showing a rise of 0.6 percent after a 0.3 percent expansion in the prior quarter, adding to the picture of a recovery that is gathering pace.
The growth was boosted by stronger agriculture, production, construction and services sectors during the second quarter.
The numbers are described by Howard Archer, economist with HIS Global Insight, as ’very encouraging‘. He observes: “While we suspect that the economy will struggle to sustain the second quarter growth rate, it does appear that it is genuinely moving to a firmer footing and we anticipate that it should be able to achieve steady if unspectacular expansion around 0.4-0.5 percent quarter-on-quarter through the second half of 2013 and then gradually pick up during 2014.”
In releasing the figures, the Office for National Statistics noted that the United Kingdom’s gross domestic product remains 3.3 percent below its peak in the first quarter of 2008. Other major economies, such as the United States and Germany, have more quickly recovered the ground lost in the global financial crisis.