Forex News: GBP/USD little changed after mixed UK business investment data

on Feb 26, 2014
Updated: Oct 21, 2019

**, Wednesday 26 February:**

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The UK’s Office for National Statistics (ONS) today reported that business investment rose by £0.8 billion or 2.4 percent q/q in Q4 2013, modestly undershooting market expectations for 2.6 percent.
According to analysts at the Royal Bank of Scotland though, “the business investment data are notoriously volatile and revision-prone”. Indeed, the third quarter reading was upgraded substantially, from 1.4 percent to 2.0 percent.

RBS’s analysts suggest that the business investment data “may well assume a greater importance for markets”, given the recent comments of Bank of England governor Mark Carney that lacklustre capital expenditures in the UK are tying policymakers’ hands on rate hikes.
In an interview with the BBC on 16th February, Carney said interest rate increases will be “limited and gradual” as “there are some very big forces that will persist”.

“What we’ve had is a consumer-led recovery,” he emphasized. “What we haven’t seen yet is business investment pick up. We haven’t seen net exports pick up.”
The ONS also released its second estimate for the UK’s GDP in the fourth quarter of 2013, sticking with expansion of 0.7 percent q/q.

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The pound has gained slightly since release of the UK data, in an apparent tilt to the resistance near the 23.6 percent Fibonacci retracement of February’s upswing at 1.6687 (see chart above). Sterling buyers may step up further once the Relative Strength Index on the 4-hour chart eases to its line of support, as projected from 3 February.

The US economic calendar today offers January’s New Home Sales at 15:00 UTC. Analysts expect the annualized print for new single-family homes sold during January to come in at 406,000, down from December’s 414,000.
Right now, the GBP/USD is trading at around 1.6689, up 0.07 percent intraday.


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