Pound Sterling gains against its peers as UK GDP data beats estimates

The Pound Sterling gains buyers’ interest after the release of the stronger-than-expected UK monthly GDP data for February.
UK monthly GDP grew at a robust pace of 0.5% vs. 0.1% estimates.
US-Iran truce hopes have battered the US Dollar badly.

Sagar Dua FXStreet

The Pound Sterling (GBP) attracts bids against its major currency peers, trading 0.14% higher to near 1.3580 against the US Dollar (USD) during the European trading session on Thursday after the release of the stronger-than-projected United Kingdom (UK) Gross Domestic Product (GDP) data for February.

The Office for National Statistics (ONS) has reported that the economy grew 0.5% Month-on-Month (MoM), while it was expected to grow steadily by 0.1%. January’s figure was revised higher from 0% to 0.1%.

The UK’s Industrial Production data for February has also come in better-than-expected. The data arrives at 0.5% against estimates of 0.2%. In January, Industrial Production declined by 0.1%. However, MoM Manufacturing Production has surprisingly contracted by 0.1%, while it was expected to have grown at a faster pace of 0.3% after rising 0.2% in January, revised higher from 0.1%.

Meanwhile, the US Dollar has been battered badly by optimism that the United States (US) and Iran could announce a permanent ceasefire soon. During the press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades almost flat around 98.00. In the Asian trade, the USD Index posted a fresh six-week low at 97.83.

US-Iran truce hopes are boosted by comments from Washington that both nations are close to ending the war soon. On early Wednesday, US President Donald Trump said in an interview with Fox Business, “I think it’s close to over, yeah. I view it as very close to being over," when asked about how long the war with Iran will last.

(This story was corrected at 08:20 GMT to say in the third paragraph that UK's Manufacturing Production rose 0.2% in January, revised higher from 0.1%)

Economic Indicator

Gross Domestic Product (MoM)

The Gross Domestic Product (GDP), released by the Office for National Statistics on a monthly and quarterly basis, is a measure of the total value of all goods and services produced in the UK during a given period. The GDP is considered as the main measure of UK economic activity. The MoM reading compares economic activity in the reference month to the previous month. Generally, a rise in this indicator is bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.

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