FX round-up: Pound under pressure after softer-than-expected GDP data

The pound was weaker against its major rivals on Tuesday after the first release of third-quarter UK gross domestic product came in softer than expected.

Data from the Office for National Statistics showed GDP rose 0.5% compared to a 0.7% increase in the second quarter, below estimates for a 0.6% rise.

On the year, GDP unexpectedly eased to 2.3% from 2.4%.

“Sterling spiked to downside across the global currency markets as a result of UK GDP printing below expectations,” said FXTM research analyst Lukman Otunuga.

“The GBPUSD which had four consecutive days of decline last week remains under pressure, a breakdown below the 1.5300 support on this pair may open a path to the next relevant support at 1.5200.”

David Morrison, market strategist at SpreadCo, said the GDP data should reduce the likelihood of a rate hike from the Bank of England. “But no doubt it won’t be long before BOE Governor Mark Carney takes to the airwaves to insist that he’s still considering monetary tightening,” he added.

At 1510 GMT, the pound was down 0.4% against the dollar at $1.5292 and 0.2% lower against the euro at €1.3849.

Meanwhile, the euro was a little weaker against the dollar, down 0.1% at $1.1042 after the European Central Bank’s chief economist, Peter Praet said that there would be “no taboos” with regard to discussions about additional monetary loosening to push up inflation in the euro bloc.

In an interview with Agence France Presse, Praet said: "The governing council has given a very strong message: it is ready to draw the consequences of its assessment of the monetary policy stance.

The euro fell sharply last week after ECB President Mario Draghi’s dovish comments at the post rate announcement press conference, during which he left the door open to more easing in December.

The yen grained ground against the dollar on Tuesday amid growing expectations that the Bank of Japan won’t announce any additional monetary stimulus at its policy meeting on Friday and as investors bet the Federal Reserve will keep the benchmark interest rate near zero on Wednesday.

The dollar was down 0.5% at JPY120.40.