Friday’s UK GDP (Gross Domestic Product) data release was in line with the forecast, revealing that the yearly trend set by the first quarter continues in the second one, the British economy expanding at a similar pace. The report being released in the morning, the information merged with the trend during the whole day, so if the morning session opened at 1.5400 GBP/USD, at the end of the day the pair ticked higher with 0.17%, at 1.5429. This second estimation of the UK GDP pointed that the center piece of the economic expansion is the service sector, aided also by the increase in exports. Given this GDP upbeat, speculations now grow over the possibility of a new rate hike this year from BoE’s (Bank of England) behalf.
Although the GDP increase, the ONS (Office for National Statistics) left the yearly growth rate unchanged at 2.6% (yoy), as well as the quarterly one at 9.7% (qoq) as expected. Further relevant details in the report would be the UK business investments rising higher than anticipated, with a 2.9% qoq (expected 1.7%) and 5% yoy (expected 4%). Between Q1 and Q2 there has been a GDP expansion of roughly 0.7%, with a GBP/head increase of 0.5%. To compare, between 2013 and 2014 the gross domestic product gained 2.3%
Switching on the other side of the pair, in the US personal spending and incomes both rose – though the first one not as much as expected. Incomes met the 0.4% threshold, but purchases went up with only 0.3% in July from June’s 0.2%, the forecasted value being of also 0.4%. The information comes around after Q2’s GDP upward revision on Thursday and a higher than expected durable goods figure released on Wednesday. The core PCE (Personal Consumption Expenditures) index rose with 0.1% from June to July and 1.2% from last year’s July, marking the smallest yearly increase since 2011. The headline figure follows the same trend, rising 0.1% in July and 0.3% since July, 2014.
The yellow metal increased in value with 1% on Friday, even though it had against it US’s income and spending data and a stronger USD index. Due to taking profit from some short positions, the gold was able to rebound. Gold is currently trading in the 1135.40/ounce area, with an 1169.50 resistance in proximity (last week’s high) and the 1200.00 threshold above. The support can be set at 1132.90 (November, 2014’s low) and further down at 1123.10 (Friday’s low).
