GBP/USD defends 1.3600 after UK GDP misses estimates with 0.4% in August
- UK GDP arrived at 0.4% MoM in Aug vs. 0.5% expected.
- GBP/USD remains little changed on the downbeat UK GDP.
The UK GDP monthly release showed that the economy expanded less-than-expected in August, arriving at 0.4% vs. 0.5% expectations and 0.1% previous.
Meanwhile, the Index of Services (August) came in at 3.7% 3M/3M vs. 1.2% expected and 5.2% prior.
Key highlights (via ONS)
Accommodation and food service activities, and arts, entertainment and recreation contributed most positively to services growth in August 2021.Medium (h2)
There were falls in health output and retail trade.
Production output increased by 0.8% in August 2021, mainly because of the continued increase in the extraction of crude petroleum and natural gas following the recent temporary closure of oil field production sites.
Construction contracted, with output down by 0.2% in August 2021; the sector is now 1.5% below its pre-pandemic level.
GDP growth for July 2021 has been revised from 0.1% growth to a 0.1% fall; mainly because of downwardly revised data for the manufacture of motor vehicles, oil and gas, and changes to how health output is measured.
GBP/USD reaction
The cable keeps its range around 1.3610 on the UK growth numbers. The spot trades 0.18% higher on the day.
About UK GDP
The Gross Domestic Product released by the National Statistics is a measure of the total value of all goods and services produced by the UK. The GDP is considered as a broad measure of the UK economic activity. Generally speaking, a rising trend has a positive effect on the GBP, while a falling trend is seen as negative (or bearish).
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
