Now it’s Sterling’s turn. GBP dives sharply as Q1 GDP grew merely 0.1% qoq much worse than expectation of 0.3% qoq and prior quarter’s 0.4% qoq. Annual rate was unchanged at 1.4% yoy. Index of services rose 0.4% 3mo3m below expectation of 0.6%. Now, it could be the final nail to close the case of a May BoE rate hike.
Some selling was seen in GBP/USD prior to the release, but it quickly accelerates down after the disappointment. GBP/USD is now on course for 1.3711 key support level. Decisive break there will be a strong indication of bearish medium term reversal. But remember, US will release Q1 GDP later today too.
