The pound falls against the dollar on August 10 despite good UK Q2 GDP

Markets
Insider

• UK GDP estimates in-line: a quarterly growth of 0.4%
  and annual growth of 1.3%.
• The figures failed to revive the pound, which hit a
  fresh year low against the dollar on Friday morning.
• Sterling is suffering from “no deal” Brexit fears and a
  strong dollar.

LONDON — In line UK GDP growth in the second quarter failed
to revive the bombed-out pound on Friday.

The UK Office for National Statistics said on Friday morning that
its preliminary estimate for UK GDP growth in the second quarter
was 1.3%, in line with economists’ forecasts and up from 1.2% in
the first quarter. Quarter-on-quarter growth came in at 0.4%, in
line with consensus forecasts and up from 0.2% in the previous
quarter.

The figures failed to do much to reverse the poor performance of
the pound on Friday. Sterling has been under pressure all week
amid rising fears of a “no-deal” Brexit. A rallying dollar put
more pressure on the currency. The dollar index, which measures
the currency’s strength against a basket of others, hit its
highest level since June 2017 on Friday.

The
pound was down 0.5% against the dollar to $1.2761 at 9.31
a.m. GMT (5.31 a.m. ET), a minute after GDP figures were
released. It marks a fresh 11-month low for the pound against the
dollar.

“The fears of a no-deal Brexit have piled the pressure on the
pound and the dollar’s rally has come as a sucker punch,” Neil
Wilson, the chief market analyst at Markets.com, said in an
email.

The
pound was up around 0.11% against the euro at the same time.
The euro is suffering amid concerns about possible contagion from
Turkey’s economy and currency spreading to eurozone banks.

Connor Campbell, a financial analyst with SpreadEx, said: “That
the pound managed to nudge higher against the euro, alongside the
single currency’s own 0.7% slide against the greenback, suggests
Friday’s fall is a tad more informed by trade war-fearing
investors pouring into the safe-haven dollar than the week’s ‘no
deal’ Brexit concerns (though that undoubtedly isn’t helping).”

See the latest EUR-USD movements here.