The pound sterling goes on to wilt as the market dumps the currency in front of year-end. Sterling was effortlessly the worst-performing G10 foreign currency once again on Wednesday as a result of downwards revision in final third quarter GDP numbers.

The Office of National Statistics revised Q3 GDP to +0.7% quarter over quarter from the previous +0.8% reading which had been sufficient to send the pound to a nearly one hundred pip fall. GBP/USD dropped beneath the 200-day moving average for the first time since September. The Bank of England minutes failed to move the market even with a slight bias towards hiking rates. The minutes uncovered a three-way split for the 3rd sequential month, as estimated.

Seven from the nine MPC members voted for no change in economic policy while Andrew Sentance voted to raise rates and Adam Posen elected to increase bond purchases. The complete tone of the minutes implied that voters are changing towards Sentance’s camp. „Most of those members considered that the accumulation of news over recent months had probably shifted the balance of risks to inflation in the medium term upwards,“ the minutes said.

The Swiss franc goes on to outperform as it was the top G10 performer one more time. The fundamentals drivers of the current move in CHF are unclear and flows could possibly be driving the move. The chance, nevertheless, that there’s a deep underlying interest in francs should not be eliminated. We believe that the long-term sovereign issues inside the euro region will justify a bid for the CHF as a safe place throughout the year forwards.

The top news from The United States on Wednesday was an upward revising to 3rd quarter GDP to an annualized pace of 2.6% from 2.5%. This has been viewed as a letdown, nonetheless, because economists were planning on a modification to 2.8%.. The unexpectedly lesser reading came due to a downward revising in individual consumption from 2.8% to 2.4%. The slowing consumer spending is a bad signal for holiday spending. Inflationary details from the report proceeds to backup the Federal Reserve’s case for QE2. Core prices rose at a 0.5% annualized pace, the slowest since record-keeping commenced in 1959.

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