Great Britain Pound (GBP) has been on a 3-day massive sell off after the prime minister announced a referendum as early as June. The mayor of London and other notable influential politicians are all supporting an exit from the European Union. As a result of this, GBP has been the biggest loser of this decision. GPBUSD has sold off from the highs of 1.43 and now trading at the lows of 1.390.
Later today, the UK GDP data will be released and market is anticipating 0.5% (QoQ) for fourth quarter which is unchanged from the previous reading and 1.9% (YoY). A disappointing data, which is lower than the expected figure highlighted above might see a big drop on GBPUSD to as low as 1.36 which is the 2009 lows and eventually 1.34 which is 2008 lows. A stronger than expected figure could see prices rally to the highs of 1.40 but it might not last long as the Brexit uncertainty will trigger another sell-off.
Yesterday, some economic data from US economy further indicates that the economy is slowing down. The Services pmi data was below expectation at 49.8 Versus 53.5%. This is the lowest reading in more than 28 months. Also, New Home Sales data also fell below estimate at 494,000 as against 520,000.