Global macro overview for 28/07/2015:
According to recent events, the UK GDP is expected to accelerate by 0.7% q/q (2.6% y/y), just in line with economists’ expectations, but better than the previous reading of 0.4% q/q (2.9% y/y). Moreover, the GDP is projected to increase even more: 2.5% in 2015 and 2.6% in 2016. The main leaders are services, finances, and North Sea oil output. A pickup in wage growth (mainly in construction) is adding to the total GDP as well. That is why the UK economy might not necessary need an extra help from such a low rates at this point of economic cycle. This is why the next most important things to watch are comments from Bank of England Governor Mark Carney about low interest rates, as the UK economy might be ready for one or two rate hikes this year.
The GBP/USD pair rose on the back of the latest data. Currently, it is trying to challenge the golden trendline. Any breakout above the level of 1.5669 is bullish in the short-term and recent highs might be tested again.
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