UK GDP Estimate And Construction Data Revision Could Prove Positive For Pound Euro Exchange Rate (GDP EUR)

Published: Monday, 11 February 2013 09:00 BST - Written by Minesh Chaudhari

STORY LINK UK GDP Estimate And Construction Data Revision Could Prove Positive For Pound Euro Exchange Rate (GDP EUR)

As last week’s session in the currency markets drew to a close, more data was released which hinted that the sharp downturn during the last three months of 2012 marked a near-term nadir for Britain’s economic situation and that the new year has seen the UK PLC turn a corner.

The UK Office of National Statistics (ONS) had originally found that activity in Britain’s construction sector had increased by a paltry 0.3% during Q4, but Friday’s session saw the ONS dramatically revise this figure to a far more respectable 0.9%. There was more positive news for the British economy and for the Pound Sterling when the widely-respected think tank the NIESR released its rolling quarterly GDP estimate for the UK economy just before Friday’s equities close. The figure, which is always closely-watched because the NIESR uses the British Treasury’s economic modelling software to generate its forecast, predicted that there had been no change in the levels of domestic economic activity in Britain during the three months leading up to end of January, 2013.

The positive alteration to Britain’s Q4 construction sector output and the pick-up in the NIESR’s rolling quarterly GDP prediction hints that there is a decent chance that the UK government’s Q4 GDP figure may well be upwardly revised from initial estimates of -0.3%. Any such announcement from the ONS would be sure to add further fuel to Sterling’s recent renaissance which has seen the Pound to euro exchange rate (currency : GBP EUR) improve from the low 1.1400s late on Tuesday all the way up to the mid-1.1800s on Friday afternoon.

Meanwhile, on the other side of the Atlantic, Friday’s afternoon’s session saw the publication of an encouraging set of US trade data which suggested that there may be improvement to come during 2013 in the world’s number one economy. The US import / export numbers revealed that America’s trade gap had unexpectedly narrowed to $38.5bn in December – this was significantly down from November’s -$48.6bn showing and far better than the -$46.0bn which analysts had been anticipating. The data saw the Pound US Dollar exchange rate (currency : GBP USD) end the week trading back down in the high 1.5700s once more.

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