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

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.

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