Sterling (GBP) Ignores UK GDP Data, Eyes Brexit Bill Vote

Sterling, UK GDP Data and Brexit

  • UK growth continues to slow down.
  • Brexit vote on next Tuesday is key for GBP.

See how our Q1 2019 Trading Forecast for GBP can help you when trading.

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UK Growth Slows Down as Expected

GBPUSD was little moved after the latest set of UK growth and production figures painted a familiar picture. Growth in the UK economy continued to slow down after a strong mid-year performance with a steep decline in manufacturing outweighing positive contributions from the services and construction sector. UK m/m growth in November was 0.2% while the 3m/3m growth was 0.3%. Manufacturing production m/m missed expectations and fell to -1.1% (est 0.4% and prior month -0.6%) while industrial production for the same time frame fell to -0.4% (est 0.2% and prior month -0.5%).

GBPUSD was little changed post-release although the British Pound had slipped marginally lower across the board ahead of the figures. UK data is having no bearing on the level of Sterling in the last few weeks and traders continue to wait for the outcome of the Brexit bill vote next Tuesday, with PM May’s bill expected to be defeated heavily.

GBPUSD Five Minute Price Chart (January 11, 2019)

Sterling (GBP) Ignores UK GDP Data, Eyes Brexit Bill Vote

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IG Client Retail sentiment data confirms a negative picture for the GBPUSD. Retail are 58.1% net-long the pair, a bearish contrarian indicator. However, recent daily and weekly positional changes give us a mixed trading bias.

What is your view on Brexit – bullish, bearish or bored?? You can let us know via the form at the end of this piece or you can contact the author at nicholas.cawley@ig.comor via Twitter @nickcawley1.

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