The pound is maintaining its gains seen over the last week after the run of positive UK data which have helped drive the pound higher. This morning sees UK Gross Domestic Product (GDP) numbers at 09:30 and could make for a very interesting morning.
The GDP numbers are for the second quarter of 2016 and represents the period from April to June in the run up to the referendum for Britain to withdraw from the European Union. Expectation is for GDP to hold steady at 0.6% which would be helpful for the pound. My view is that there may be a very small deterioration in the numbers pre-Brexit as a result of some uncertainty ahead of the vote.
Any weakness would be seen as sterling negative as it would signal further weakening in the months ahead in a post-Brexit period. The question this morning is whether any decline in the UK has actually started or not and as such for me this is a very sensitive release and should make for a very interesting end to the week for sterling exchange rates.
After the Bank Holiday weekend focus moves to mortgage approvals and house price data and the ever important Purchasing Managers Index for the manufacturing, construction and services sectors. The PMI numbers which were gloomy last month could give new direction for the pound. Any improvement here could see the pound rally although I expect the mood to remain slightly glum from businesses in the current climate.
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