The Britain pound plunged against most of its counterparts on Friday after shocking gross domestic product data indicated that U.K. remained in recession. U.K. Q3 GDP data came out much weaker than expected (-0.4% versus economists' forecast of a rise of 0.2%). The British economy contracted for a record sixth straight quarter, adding speculation that the Bank of England will need to further expand its quantitative easing programme. Sterling tumbled to as low as 1.6300 in New York afternoon after hitting a six-week high at 1.6694 earlier in European morning. Eur/gbp rallied from 0.9003 to 0.9216 while gbp/jpy declined sharply from 153.23 to 150.00 in New York afternoon.
Earlier at Asian opening, short-term speculators sent euro to a fresh 14-month high of 1.5061 versus the greenback before retreating to 1.4991 on long-liquidation at European opening. Despite cable's intra-day selloff, the single currency recovered due active cross buying vs the pound as well as the release of better-than-expected German industrial orders which rose by 2.0% versus economists' forecast of 1.2% increase. Euro later retreated to 1.4985 in late New York session as the 109-point fall in DJI reduced demand for higher-yielding assets. In addition, European Central Bank Governing Council member Ewald Nowotny said that the eurozone is unlikely to suffer a double-dip recession. He also repeated that it would be premature to remove support measures at the moment.
Elsewehere, dollar strengthened against the Japanese yen with some traders attributed the yen's weakness on concerns over Japan Airlines and Japan Post. In European afternoon, although the greenback retreated from 91.93 to around 91.49 in part due to cross buying in jpy especially versus sterling, renewed buying interest on dips lifted the price and the rise accelerated in New York morning after the release of better-than-expected U.S. existing home sales data (5.57 million in September versus economists' forecast of 5.35 million n well abv 5.09 million in August). Usd/jpy later climed to a high of 92.13 in October in late New York session.
Monday will be a holiday in New Zealand. Data to be released next week include Australia PPI, German Gfk index, U.K. nationwide house price, U.S. midwest manufacturing index on Monday, U.K. CBI distribution trade, U.S. consumer confidence on Tuesday, Japan retail sales, Australia CPI, German CPI, U.S. durable goods, new home sales on Wednesday, New Zealand rate decision, trade balance, Japan industrial production, German unemployment rate, eurozone business climate and economic sentiment, U.S. GDP, PCE index, jobless claims, Canada, PPI on Thursday, Japan unemployment rate, manufacturing PMI, household spending, national CPI, construction orders and housing starts, U.K. Gfk survey, German retail sales, eurozone unemployment, Switzerland Kof indicator, U.S. personal income and spending, Chicago PMI, University of Michigan consumer survey, Canada GDP on Friday.