Pound Eases As U.K. Economy Shrinks
November 11 2022 - 12:10AM
RTTF2
The pound retreated from its early highs against its most major
counterparts in the European session on Friday, as the U.K. economy
contracted in the third quarter, fuelling concerns over a
recession.
The first estimate from the Office for National Statistics
showed that the UK economy contracted for the first time since
early 2021 in the third quarter.
Gross domestic product shrank 0.2 percent sequentially,
offsetting the 0.2 percent gain in the second quarter. However, the
pace of decline was slower than economists' forecast of -0.5
percent.
Chancellor Jeremy Hunt remarked that there is a tough road ahead
and difficult decisions will be required to restore confidence and
economic stability.
The GBP/JPY pair fell to 163.58, its lowest level since October
13. The pound is seen locating support around the 152.00 level.
The GBP/CHF pair pulled back to 1.1260, from a high of 1.1321
set at 2:50 am ET. On the downside, 1.11 is possibly found as its
next support level.
The pound was down at 0.8749 against the euro. The pound may
test support around the 0.89 level, if it drops further.
In contrast, the pound jumped to 1.1774 against the greenback,
setting a 2-1/2-month high. The pound is likely to find resistance
around the 1.22 level.
Looking ahead, University of Michigan's preliminary U.S.
consumer sentiment index for November is set for release in the New
York session.
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