Forex: GBP/USD: Sterling plunges 250 pips lower on unexpected GDP contraction

Fri, Oct 23 2009, 08:53 GMT
http://www.fxstreet.com

FXstreet.com (Barcelona) - The Pound is dropping like a stone, retreating from 6-week high and giving away about 250 pips against the Dollar after Preliminary UK GDP figures showing an unexpected contraction on the third quarter.

British economy contracted at a 0.4% pace in the third quarter and at a 5.2% pace year on year, according to preliminary estimates, to disappoint markets which expected a 0.1% quarterly advance and a 4.7% year on year decline.

GBP/USD advances at levels below 1.6440 after dropping about 250 pips from 1.6685, fresh 6-weeks high before GDP figures were released. At the moment, next potential support levels lie at 1.6435 Oct 19 high, and below here, 1.6400 and 1.4340/60.

GBP/USD

© 2009 “FXstreet.com. The Forex Market” All Rights Reserved. Every effort is made to provide accurate and complete information. However, with the thousands of documents available, often uploaded within short deadlines, we cannot guarantee that there will be no errors. Any republication or redistribution of FXstreet.com content is expressly prohibited without the prior written consent of FXstreet.com.
Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Any opinions, news, research, analyses, prices or other information contained on this story, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.