(MENAFN– ecpulse) A busy day is anticipated with major fundamentals scheduled to be released by the world`s largest economies on Thursday, starting with UK final GDP report of the first quarter, followed by Eurozone confidence data for June.
The UK economy probably expanded modestly at 0.3 percent in the first three months this year, after contracting by 0.3 percent in the fourth quarter a year ago, figures from the Office for National Statistics may show on Thursday. Annual GDP is expected to show 0.6 percent growth.
The austerity measures, high inflation, and weak labor market conditions are all weighing on the outlook for growth this year as growth remains very sluggish.
In fact, the sluggish economic progress is majorly dragged by the escalating sovereign-debt crisis in the Eurozone, UK`s biggest trade partner. Contraction is also driven by the deepest austerity measures adopted by the government to cut the heavy debt and high deficit.
On Wednesday, Chancellor of the Exchequer George Osborne announced extra cuts to government departments in the first year of the next parliament, promising to bring Britain’s deficit under control.
Osborne told Parliament today that the spending round he agreed on with his fellow ministers to cut 11.5 billion pounds from spending for the year beginning April 2015.
The volatility remains high and the outlook for growth is still weak and especially as data is trending worse with the start of the second quarter. The growth figures are not expected to provide sterling much support other than temporary relief as the downside pressures are intact and rising.
A further negative revision on the UK total output will push the country`s currency, the sterling Pound into further losses this week, while a positive number would actually be a surprise, and boost risk sentiment nudging the British currency higher.
The pound pared some of its losses against the dollar, pushing the GBP/USD higher to trade around 1.53335 after opening at 1.53100, while recording the highest level of 1.53450 and lowest of 1.53088.
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