FX Roundup: Pound trades higher following softer UK GDP data

The dollar headed lower against a basket of global currencies on Thursday, with the pound sterling posting gains over the last trading session before Christmas.

At 0844 GMT, the dollar was down 0.40% against the yen changing hands at JPY120.44. Concurrently, the pound was up 0.10% against the greenback exchanging at $1.4887 following softer British GDP data.

On Wednesday, final estimate of third quarter UK GDP was unexpectedly revised down 0.1 percentage point to 0.4% by the Office for National Statistics.

The statistics body also revised second quarter growth down by 0.2 percentage points to 0.5%. To the surprise of analysts, year-on-year third quarter GDP was revised to 2.1% from a previous estimate of 2.3%.

Simon Smith, chief economist at FX Pro, said, “Movements in the currency markets have been a little benign this week. Pound was a standout on Wednesday as it strengthened on the back of a softer final GDP reading.

“The dollar has weakened in this final stretch of 2015 in what has been a standout year for the greenback overall, but as we move closer towards 2016 there are few calls for dollar to repeat its 2015 strength, even despite the US Federal Reserve now finally having commenced its tightening cycle. With today being a half day for many markets, trading is over for most not only ahead of the Christmas break, but for 2015 as a whole.”

Meanwhile, the euro also registered a 0.32% gain versus the US currency to change hands at $1.0931.

Commodity linked currency crosses received some pre-Christmas respite. The Australian dollar was up 0.61% against its US counterpart exchanging at US$0.7278, along with the New Zealand dollar up 0.44% changing hands at US$0.6824. The greenback was broadly flat against the Canadian dollar exchanging at CAD$1.3846.

Finally, Latin American crosses traded lower with the dollar up 0.22% against the Mexican peso, changing hands at MXN17.2601.