24.11.201702:52 Forex Analysis & Reviews: The UK economy is not in better shape

The pound declined after the report on the growth of investments by British companies turned out to be slightly worse than the economists' forecasts. Also, the report on the GDP of Great Britain put pressure on the pair.

According to the data, the growth of investments of British companies in the third quarter of this year has slowed significantly. This happened primarily because of the uncertainties experienced by the companies in connection with the country's exit from the EU. Many are afraid of problems that might arise from the new trade agreements.

As per the report, the capital investment of British companies in the third quarter grew by 0.2% from the previous quarter. It had already added 0.5% in the second quarter. The main reduction in investment was observed in vehicles and computer equipment. Good growth was demonstrated by investments in real estate and infrastructure.

Data on GDP growth for the third quarter of this year coincided with a preliminary estimate, which also had a negative impact on the rate of the British pound as there is a clear slowdown in economic growth by the end of the year.

According to the report of the National Bureau of Statistics, UK GDP for the third quarter was not revised and grew by 0.4% compared to the previous quarter. Compared to the same period in 2016, the UK economy increased by 1.5%. These data corresponded to the forecasts of economists.

As noted in the report, the GDP data for the 3rd quarter are in line with the forecast of the Office for Budget Responsibility for 2017.

As for the technical picture of the GBPUSD pair, only a return to the morning resistance level of 1.3325, which was formed yesterday in the afternoon, will allow the buyers of the British pound to count on the continuation of the upward momentum. The main targets will be the levels of 1.3370 and 1.3420. As for the possible technical correction against the backdrop of the low volume of trading today and tomorrow, in connection with the Thanksgiving Day in the US, good support is located in the areas of 1.3260 and 1.3220, where large buyers will return to the market.

The Canadian dollar fell sharply against the US dollar after a weak report on retail sales. According to various sources, the growth of retail sales in Canada was expected to be 1% lower than in the previous month. The forecast was based on a good increase in sales at gas stations.

However, according to the report, retail sales in Canada in September this year rose by only 0.1% compared with August. Retail sales in Canada excluding cars in September increased by 0.3%.