Talking Points:
British Pound May Rise as Firm 4Q GDP Figures Boost BOE Rate Hike Bets
Australian Dollar Edges Higher on Swelling Risk Appetite in Overnight Trade
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The preliminary set of fourth-quarter UK GDP figures headlines the economic calendar in European trading hours. The year-on-year economic growth rate is expected to rise to 2.8 percent, the highest since 2007. The quarter-on-quarter increase is seen registering at 0.6 percent, a print squarely in line with the near-term trend average.
UK economic news-flow has increasingly outperformed relative to consensus forecasts over recent months, suggesting analysts are underestimating the economy’s vigor and opening the door for an upside surprise. Such an outcome may fuel speculation that a Bank of England interest rate hike may come sooner than currently priced in, boosting the British Pound.
The Australian Dollar outperformed in overnight trade, rising as much as 0.2 percent on average against its leading counterparts. The advance tracked a move higher in Australia’s benchmark S&P/ASX 200 stock index, pointing to swelling risk appetite as the catalyst behind upside momentum.
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Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
23:50
JPY
PPI Services (YoY) (DEC)
3.6%
3.5%
3.6%
0:30
AUD
NAB Business Confidence (DEC)
2
–
1
0:30
AUD
NAB Business Conditions (DEC)
4
–
5
1:30
CNY
Industrial Profits (YoY) (DEC)
-8.0%
–
-4.2%
5:00
JPY
Small Business Confidence (JAN)
–
46.7
European Session
GMT
CCY
EVENT
EXP
PREV
IMPACT
9:30
GBP
Index of Services (MoM) (NOV)
0.3%
0.3%
Low
9:30
GBP
Index of Services (3M/3M) (NOV)
0.9%
0.7%
Low
9:30
GBP
GDP (QoQ) (4Q A)
0.6%
0.7%
High
9:30
GBP
GDP (YoY) (4Q A)
2.8%
2.6%
High
9:30
GBP
BBA Loans for House Purchase (DEC)
36500
36717
Low
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EURUSD
1.0815
1.1013
1.1126
1.1211
1.1324
1.1409
1.1607
GBPUSD
1.4773
1.4911
1.4994
1.5049
1.5132
1.5187
1.5325
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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Source: Daily fx