Robust U.K. GDP Report To Propel GBP/USD Rebound

– U.K. Gross Domestic Product (GDP) to Expand Annualized 2.1% for Second Straight Quarter.

- Will Signs of Better-Than-Expected Growth Keep the Bank of England (BoE) on the Sidelines?

Trading the News: U.K. Gross Domestic Product (GDP)

GBP/USD may stage a larger rebound over the next 24-hours of trade as the advance Gross Domestic Product (GDP) report is expected to show the U.K. economy expanding another annualized 2.1% in the third-quarter of 2016, and signs of better-than-expected growth may encourage the Bank of England (BoE) to retain the current policy throughout the remainder of the year as the central bank sees growing risk of overshooting the 2% target for inflation.

What’s Expected:

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Why Is This Event Important:

The BoE may continue to embark on its easing-cycle over the coming months as ‘a majority of members expect to support a further cut in Bank Rate to its effective lower bound,’ but Governor Mark Carney and Co. may largely endorse a wait-and-see approach going into 2017 as central bank officials warn the next quarterly inflation due out on November 3 will reflect the sharp decline in the exchange rate. Even though the threat of a ‘hard Brexit’ instills a long-term bearish outlook for the British Pound, GBP/USD may face a larger correction over the days ahead especially as the BoE appears to be in no rush to implement lower borrowing-costs.

Expectations: Bullish Argument/Scenario

The ongoing improvement in the labor market accompanied by the pickup in private-sector lending may foster a strong GDP report, and a positive development may spark a bullish reaction in the British Pound as market participants push out bets for a BoE rate-cut.