Fxstreet.com (Barcelona) - GBP/USD is falling after the worse than expected US GDP, the pair has fallen around 40 pips from 1.4740 to test the 1.4700 level. On the day, The pair has risen 0.40% from opening price at 1.4641 to the currently range of 1.4695/1.4505.
The US annualized Gross Domestic Product has fallen 6.1% in the first quarter of the year, well below of 5.0% decreases expected bu market but better than 6.3% decreases posted in the previous quarter. GDP price index rises 2.9% in the first quarter from 0.5% posted in the last quarter of 2008. Expectations were 1.8% increases.
According to Kathy Lien, Director of Currency Research at GFT, GDP Contracts 6.1 percent Sending Dollar Lower: U.S. GDP growth contracted by 6.1 percent in the first three months of the years, sending the U.S. dollar tumbling against Japanese Yen and rising against higher yielding currencies. The data was much worse than the market's forecast which is part of the reason we are seeing a fresh wave of risk aversion this morning. The sharp drop off came from a decline in private investment and a contraction in both imports and exports. Government spending also fell for the first time 6 quarters. However there is a silver lining report which is personal consumption which rose 2.2 percent after falling for 2 consecutive quarters.
For more information, read our latest forex news.