The British monthly GDP is announced on Friday at 09:00 MT time.
UK economy speeds up a bit, as BoE’s rate decision will be soon
In May, the British economy managed to accelerate having speeded down in the beginning of this year, as follows from official data. Apparently, it gives the BoE more grounds to have its rates lifted already in August.
A fresh monthly result of GDP disclosed that in May the world's number five economy tacked on by 0.3% from April.
It was up from April’s surge of 0.2% and also in line with the prediction in a Reuters survey of market experts, thus marking the strongest surge since November. That’s what the Office for National Statistics informed on Tuesday.
The British pound headed south versus the evergreen buck after the report, demonstrating a mixed picture of the UK economy. Surge showed up generally from the dominant services sector. As for factory output, it turned out to be dismal.
BoE Governor Mark Carney as well as other top statesmen of Britain’s key financial institution opted not to have rates lifted in May due to the early 2018 deceleration.
Instead, they made up their mind to wait for indications that the weakness happened to be temporary and provoked by unusually cold winter weather rather than an indication of broader issues before the UK’s exit from the European bloc in 2019.
The British economy managed to rally by 0.2% for the three months to May, exactly as anticipated, having stagnated for the three months to April.
The economy soared by 1.5% in annual terms in contrast with May 2017.
Meanwhile, in May, the country’s services industry managed to jump by 0.3% month-on-month, speeding down from an upwardly updated 0.4% in April.
For the three months to May, surge in UK services, making up about 80% of the country’s economic output, speeded up to 0.4% from 0.2%.
The main market tendency today is that the US dollar is rising against its major peers and riskier assets such as stocks and oil are plummeting.
The USD continues dipping, while the GBP is rising on hopes for the Brexit deal done today.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.