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UK GDP to confirm first BoE rate hike approaching - BNP

FXStreet (Bali) - BNP FX Strategists expect today's UK GDP to miss consensus by a small fraction, yet they reiterate that the Sterling has further room to strengthen in order to reflect positive macro story.

Key Quotes

"Our UK economist expects this morning’s Q3 GDP release to show that growth has slowed to 0.5% q/q from 0.7%, reflective of the softer higher-frequency activity indicators in recent months."

"This is slightly below expectations of a 0.6% q/q print, but does still imply the economy is running above potential which should eventually lead to rising price pressures and tighter monetary settings."

"We view that the GBP has further room to strengthen in order to reflect its positive macro story and remain short EURGBP with a 0.70 target."

"Our BNP Paribas FX Positioning Analysis has highlighted this week that GBP longs are starting to rebuilt with its score rising to +19 from -10 in recent weeks, but there remains plenty of score for GBP to be bought."

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