GDP Falls on UK Housing and Antipathy for Global Risk.

GBP

The Pound Sterling dropped on Tuesday after a rather risky start to the week. The Asian session sparked fears around China’s reaction to U.S. House Speaker Nancy Pelosi’s visit to Taiwan as Mainland China, and President Xi Ping has high hopes for uniting the two nations. If this situation escalates, we could see more pound weakness against the USD as investors are focused on safety.

The details and consequent reaction from the visit could provide key insights into the mindsets of the involved countries regarding global market price action.

UK housing prices missed forecasts on both YoY and MoM data this is hinting at increased property demand owing to increased pressure on the consumer from higher interest rates. This being said, the overall statistic shows a slight increase in housing price growth, but future releases could see the effect of dented consumer confidence filter through.

Inflation pressures might make the forthcoming Bank of England (BOE) meeting interesting, although consensus currently favors a 50bp hike. The pound may not find significant upside support as it is already largely priced with an unlikely scenario of a hawkish surprise.

The market has witnessed the Pound’s weak response to several major central banks, and Thursday might not be any different.

You might also like: RBA’s 0.5% Hike Sends AUD Diving!

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