Forex – GBP/USD edges higher despite U.K. GDP data

© Reuters.  Pound inches higher despite U.K. GDP data

The pound edged higher against the U.S. dollar and the euro on Wednesday, even after data showed that the U.K. economy grew less than initially expected in the third quarter.

GBP/USD inched up 0.27% to 1.4861 during European morning trade. Sterling was also higher against the euro, with EUR/GBP shedding 0.52% to 0.7350.

The U.K.’s Office for National Statistics said gross domestic product expanded 0.4% in the three months ended September 30, missing forecasts for 0.5%. Preliminary estimates initially pegged U.K. growth at 0.5%.The U.K.’s economy grew by 0.7% in the preceding quarter.

Year-over-year, U.K. economic growth expanded 2.1% in the third quarter, downwardly revised from a preliminary estimate of 2.3%. The U.K. economy grew at an annualized rate of 2.4% in the second quarter.

Meanwhile, investors looked ahead to key U.S. economic data later in the session for further indications on the strength of the economy. The U.S. is release a string of reports, including data on durable goods orders, new home sales and consumer sentiment.

Data on Tuesday showed that the U.S. economy grew 2.0% in the third quarter, downwardly revised from a preliminary estimate of 2.1%, but above expectations for 1.9%. A separate report said that existing home sales tumbled 10.5% to a 19-month low of 4.76 million units in November from 5.32 million a month earlier.

Trading volumes are expected to remain light as many traders already closed books before the end of the year, reducing liquidity in the market and increasing volatility.

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