For the 24 hours to 23:00 GMT, the GBP declined 0.27% against the USD and closed at 1.3398 on Friday, following dismal UK GDP growth report.
Data showed that Britain’s final gross domestic product (GDP) climbed 1.5% on an annual basis in the three months to June 2017, revised down from an expansion of 1.7% indicated in the preliminary figures, thus stoking concerns over the likelihood of an interest rate hike by the Bank of England (BoE) in the near-term. In the prior quarter, GDP had climbed 2.0%. Further, the nation’s mortgage approvals fell to a level of 66.6K in August, more than market expectations for a decline to a level of 67.3K. Mortgage approvals had registered a revised reading of 68.5K in the prior month.
In other economic news, the nation’s net consumer credit rose £1.6 billion in August, growing by the most three months, justifying the BoE Governor’s worries regarding lending by British lenders. Consumer credit had risen by £1.2 billion in the prior month, while markets had anticipated for an advance of £1.4 billion.
Separately, the BoE Governor, Mark Carney, confirmed that central bank is close to an imminent interest rate hike, stating that it may be appropriate to raise interest rates “in the relatively near-term”, if the British economy continues to show signs of strengthening. Carney also warned against “reckless” household borrowing, outlining that personal lending was becoming a “little frothy and should be addressed”.
In the Asian session, at GMT0300, the pair is trading at 1.3369, with the GBP trading 0.22% lower against the USD from Friday’s close.
The pair is expected to find support at 1.3337, and a fall through could take it to the next support level of 1.3306. The pair is expected to find its first resistance at 1.3413, and a rise through could take it to the next resistance level of 1.3458.
Going ahead, market participants will keep a close watch on UK’s Markit manufacturing PMI for September, scheduled to release in a few hours.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.