GBP/USD: An outside day on Friday following Thursday hanging man signals that sterling weakness could be around for some time. The first key support is at 1.5690.

The surprise on Friday came from UK Q3 advanced GDP (highlighted above). This sent sterling tumbling against all major currencies but particularly against the US dollar and euro where it fell 2.3% and 2.4% respectively. The weakness seen in the UK data increases the likelihood that on November 5th the MPC will vote to extend quantitative easing. The fall in UK GDP will contrast unfavourably against this week US Q3 GDP data which is expected to show positive growth and that of Europe. Although, the FTSE managed to shrug off this news and closed the session higher, the weakness seen in sterling more fully reflects that the UK will be lagging behind its major counterparts going forward.

This week, the UK has no data of note out instead the focus returns to the US. Thursday sees the release of Q3 GDP with consensus forecast looking at 0.1%qoq increase. Before this we have the release of consumer confidence on Tuesday and durable goods on Wednesday. The week ends with personal income, consumption and Chicago PMI. In Europe, the key data releases arrive near the end of the week with unemployment for Germany due on Thursday and Euro area unemployment due Friday. German retail sales are also released at the end of the week.

Sources: Reuters: BBC: Bloomberg: Lawshare: Deutsche Bank (db): Proquote: Financial Times: Wall Street Journal: CLSA: Sharescope: Market News. Capital Economics: CNBC: Wikipedia:

Please note this report provides a guide to some of the relevant areas that individual investors should consider discussing with an authorised adviser in relation to their specific circumstances, it does not constitute individual advice. As a result no action should be taken or refrained from being taken as a result of its content.