The British pound is showing little movement in the Thursday session. GBP/USD is currently trading at 1.3304, up 0.06% on the day.
GDP slows in October
The monthly GDP report slowed to a crawl in October, with a gain of just 0.4 per cent. This was down sharply from 1.1% a month earlier. UK growth was a stellar 8.7% in June, but the pace of growth has tailed off since then. With Covid-19 making a resurgence and authorities imposing lockdowns, there is growing concern that growth could fall into negative territory. There was, however, a pleasant surprise from manufacturing numbers. Manufacturing Production and Industrial Production were up sharply in October, with readings of 1.7% and 1.3%, respectively.
All Quiet on the Brexit front
Today’s economic numbers had little impact on the pound’s movement, as investors remain far more concerned over the Brexit talks. With just three weeks left till the December 31st deadline, the UK and EU are yet to even hint that a deal is imminent. Quite the opposite, as there have been rumblings from the European side that the chances of an agreement are only 50:50. There are some sticking points which the sides continue to grapple with, including fishing rights and the enforcement mechanisms of an agreement. If the sides can’t reach a deal, we could see the pound fall below the 1.30 level. Conversely, a deal would be a huge boost for the UK economy and would likely send the pound higher. European leaders have gathered on Thursday for a two-day summit, and the markets will be glued to any news coming out of Brussels regarding Brexit.
- GBP/USD tested support at 1.3344 in the European session. Below, there is support at 1.3284
- There is resistance at 1.3471, followed by a resistance line at 1.3538
- The pair broke below the 20-day MA earlier in the week and has continued to move to lower ground