GBP/CAD started the Tuesday session on a negative note but surged after the UK’s Office for National Statistics published a series of economic indicators, including the gross domestic product (GDP) evolution in the third quarter.
Currently, one British pound buys 1.7439 Canadian dollars, up 0.24% as of 10:42 AM UTC. So far, the daily low was at 1.7369, while the daily high was hit recently at 1.7463. Still, the price hasn’t recovered the losses caused by a correction that started yesterday, though it continues to follow the bullish path.
The UK’s economic growth decelerated in October to the slowest annual pace in about seven years. The ONS report comes ahead of the national election due Thursday.
The GDP grew by 0.7% in October year-on-year, which is the weakest advance since March 2012. In the third quarter, the growth was flat compared to the previous three months. Nevertheless, this is still a better result than a 0.2% decline expected by analysts.
Paul Dales, chief UK economist at Capital Economics, commented:
“The stagnation in GDP in October is unlikely to influence many people’s vote in Thursday’s election, but it could prompt some more (Bank of England officials) to consider voting for lower interest rates in the coming months.”
Separately, the ONS said that industrial production declined by 0.7% in the three months to October. The indicator rose in October by 0.1% in monthly terms and decreased by 1.3% year-on-year, with both figures falling short of analysts’ expectations by 0.1%.
The pound was driven by manufacturing production data, which fell in October by 1.2% year-on-year and rose 0.2% compared to September. Analysts expected a 1.4% decline and a modest 0.1% growth, respectively.
As for services and construction, both sectors couldn’t meet economists’ predictions, with construction output showing the biggest monthly decline since January last year.
In another report, the ONS said that the UK’s goods trade deficit widened as imports rose faster than exports. The indicator reached 14.5 million pounds in October, up from 11.5 billion pounds in Septembers, while analysts expected a contraction in the trade deficit.