2016-10-27 12:07:24

On Wednesday, the USD has grown against the Yen and the commodity currencies due to strong economic data, which increased probability of the more monetary policy tightening in the USA this year. According to the data, housing sales in the US primary market has grown in September. US service sector has been growing at the highest pace in 11 months in October.

The index WSJ, which shows positions of the USD against a basket of 16 currencies, has grown by 0.1% to 88.63.

Market participants do not expect that the US Fed will raise the rate in November. However, it is likl;ey that this measure will be taken in December. According to CME group, probability of the rate hike in December has now reached 74% against 60% at the beginning of October.

On Monday, Governor of the Fed St. in Louis James Bullard confirmed probability of the interest rate increase in December. Governor of the Chicago Fed Charles Evans said that the interest rate may be raised three times until the end of 2017.

Today at 11:30 (GMT+3) preliminary data on the British GDP for Q3 will be known.

GDP is a general indicator of the state of the British economy. British GDP remains one of the highest in the world on annual basis. It is expected that British GDP will grow by 2.1% on annual basis. The leading sector of the British economy is the service sector (75% of GDP), financial services account for 27.7 % of the British GDP.

The UK is one of the world's financial centers, handling 10% of the world exports of the financial services (banking, insurance, brokerage, Advisory, software). GDP data affects monetary policy decisions of the Bank of England. In case of the poor data on GDP the Bank may lower interest rates in the country, which will put pressure on the Pound. The main factors, which can force the Bank of England to lower the rate are slow GDP growth, decline in the labour market and low inflation rate. Positive data of past few weeks shows that the UK economy has stayed afloat the referendum, and that fears about Brexit have been exaggerated.GBP/USD: British GDP for Q3.  Fundamental analysis for 27/10/2016