Pound Dollar Rate Could Fall On Strong US Data

Published: Friday, 26 October 2012 09:00 BST - Written by David Woodsmith

STORY LINK Pound Dollar Rate Could Fall On Strong US Data

Yesterday’s headline-grabbing risk event came in the form of the latest UK quarterly GDP data, which battered expectations, showing the highest level of increase in a three month period for over five years. Needless to say, the Pound performed creditably on the day following the release. However, the gains made by Sterling were of a lesser magnitude than might have been anticipated given the strong figure.

Elsewhere, yesterday’s afternoon session brought a slew of US data releases to pick over. The highlight amongst these was the latest US Durable Goods data, which beat expectations, re-enforcing the belief of many investors that the world’s leading economy has turned the corner thanks to the extraordinary measures taken by the Federal Reserve in recent months.

However, an intriguing piece of data, released in the States at the same time as the Durable Goods number yesterday, revealed that the number of the continuing jobless claims came in lower than the anticipated 3,260 reading at the most recent data capture, suggesting that the biggest labour market in the world is also beginning to turn a corner.

We will learn more about the state of the America’s economy later today when two key pieces of American data are released. The Q3 GDP growth data for the giant US economy will be closely-monitored, with an annualised increase to a healthy 1.9% anticipated. Then later today, the latest Michigan Sentiment survey is published. Last month’s showing of 83.1 thrashed expectations. If this month’s edition holds at the same level, suggesting that US economic participants are remaining optimistic due to QE3, then the Greenback could firm before the weekly close as investors scale back their expectations of an increase to the $40bn per calendar month allocated to the controversial policy.

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