British pound retreated against the US dollar on Thursday, following a report to show that the final value of the annualized UK Gross Domestic Product in Q2 did not meet projections.
GBP/USD fell to a session low at 1.6034 at 9:10 GMT, after which consolidation followed at 1.6042, still losing 0.25% on a daily basis. Support was to be found at September 18th low, 1.5893, while resistance was to be encountered at September 19th high, 1.6146.
According to official data earlier today, the Gross Domestic Product of the United Kingdom expanded 0.7% during the second quarter of the year compared to the first in consonance with preliminary estimates. The annualized final GDP, however, grew by 1.3% in Q2, below the initially estimated 1.5%, after it rose 1.5% in the first quarter of 2013. This data suggested that UKs economic growth could reach 1.7% during 2013, which may exceed expectations of a 1.4% growth and also the Office for Budget Responsibilitys (OBR) estimate of a mere 0.6% growth, published in March this year, according to Markit.
Another report revealed that the deficit on United Kingdoms current account contracted by a lesser rate than anticipated during the second quarter, reaching 13.0 billion GBP instead of 11.0 billion GBP, as the deficit figure was at the amount of 21.8 billion GBP during the preceding quarter.
In addition, the yield on UK benchmark 10-year gilt was slightly changed, reaching 2.74%, marking the lowest level since August 28th. The price of the 2.25% bond due in September 2023 reached 95.74.
Meanwhile, market players began focusing on the report on the final value of US Gross Domestic Product, as median estimates pointed an expansion by 2.6% on annual basis during the second quarter. According to previous estimate, US economy expanded by annualized 2.5%. Another anticipated report will show the weekly performance of initial jobless claims in the country, as projections pointed an increase to 325 000 from 309 000 during the preceding week. The last crucial report out of the United States today encompasses the pending home sales, as they provide a signal for the future housing market activity. The median estimate pointed a 1.0% drop in August compared to July, after sales fell 1.3% in July. An upward revision of the GDP, a lesser than expected number of claims and better than forecast sales results will certainly heighten the appeal of the US dollar.
Elsewhere, the pound was slightly gaining against the euro, with EUR/GBP cross down by 0.10% for the day to trade at 0.8405 at 9:35 GMT. GBP/JPY pair recorded a 0.3% uptick to trade at 158.37 at 9:36 GMT. Last but not least, the sterling has gained 6.4% during the past six months, or the best performing currency among the 10 developed-nation currencies, tracked by Bloomberg Correlation-Weighted Indexes.
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