Hi all,
When the better than expected US GDP figure (+3.5%) was released last Thursday, this caused the dollar to weaken (surprisingly) and commodities to rally. Yet when the UK released it’s weaker than expected GDP figure (-0.4%), we saw the sterling weaken – perhaps on expectations that the Band of England would extend its quantitative easing policy and interest rates would continue to remain low for the foreseeable future.
Why did the dollar weaken on good news when the sterling declined on bad news? The positive relationship of Economic growth and a stronger currency doesn’t seem to be quite working for some reason?
When the better than expected US GDP figure (+3.5%) was released last Thursday, this caused the dollar to weaken (surprisingly) and commodities to rally. Yet when the UK released it’s weaker than expected GDP figure (-0.4%), we saw the sterling weaken – perhaps on expectations that the Band of England would extend its quantitative easing policy and interest rates would continue to remain low for the foreseeable future.
Why did the dollar weaken on good news when the sterling declined on bad news? The positive relationship of Economic growth and a stronger currency doesn’t seem to be quite working for some reason?