Pound Eases As U.K. Economy Shrinks More Than Expected
(RTTNews) - The pound retreated against its major counterparts in European deals on Thursday, as the UK economy contracted more than initially estimated in the third quarter, raising the risk of a recession.
Data from the Office for National Statistics showed that the decline in gross domestic product was revised to -0.3 percent from -0.2 percent.
Another report from the ONS showed that the current account deficit, when trade in precious metals is included, narrowed to GBP 19.4 billion, or 3.1 percent of GDP in the third quarter.
The UK is forecast to fall into recession in the fourth quarter as inflation hurts growth.
Market participants await U.S. GDP and the weekly jobless claims data due later today for more direction.
The pound was lower against the yen, at a 2-day low of 159.04. If the pound falls further, it is likely to test support around the 153.00 region.
The pound touched 1.2040 against the greenback, a level unseen this month. The pound may find support around the 1.18 mark.
The pound dipped to 1.1158 against the franc, its weakest level since November 16. The pound is poised to challenge support around the 1.10 mark.
The pound reached as low as 0.8818 against the euro, setting over a 5-week low. The next possible support for the pound is seen around the 0.90 level.
Looking ahead, U.S. GDP data for the third quarter and weekly jobless claims for the week ended December 17 will be published in the New York session.
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