Sterling slips after record UK GDP fails to impress

0
77
imageForex3 hours ago (Jun 11, 2021 12:15)

© Reuters. FILE PHOTO: A British Pound banknote is seen in front of displayed stock graph in this illustration taken May 7, 2021. REUTERS/Dado Ruvic/Illustration/File photo

By Joice Alves

LONDON (Reuters) -The pound edged lower and was on track for the second consecutive weekly loss versus the dollar with analysts saying data showing Britain’s recovery from the pandemic sped up in April slightly undershot market expectations.

Britain’s GDP was a record 27.6% higher than a year earlier when the virus was rampant. But economic output remained 3.7% below its level in February 2020, before the pandemic led to lockdown measures.

Against the dollar, sterling was down 0.1% to $1.4163 at 1108 GMT, after falling to a one-month low of $1.4071 on Thursday. It was 0.1% higher also versus the euro at 85.76 pence, at a one week high.

“UK GDP data release this morning, while strong, did not quite meet market expectations. Also, reports that the re-opening of the economy could be delayed beyond June 21 should limit enthusiasm for GBP versus the euro,” said Jane Foley, Head of FX Strategy at Rabobank.

England was set to fully lift lockdown restrictions on June 21, helped by a swift vaccine roll-out that has brightened Britain’s economic outlook. But with the Delta variant of COVID-19 first detected in India spreading fast, Prime Minister Boris Johnson is expected to decide on Monday (NASDAQ:MNDY) whether to delay the reopening.

Sterling was under pressure this week after Britain and the European Union failed to agree on solutions to post-Brexit trade problems in Northern Ireland.

It won back a little ground on Thursday as investors expected the Federal Reserve to keep its policy unchanged even after data showed U.S. consumer prices climbed; while the European Central Bank maintained an elevated flow of stimulus as expected.

Sterling has also found some support from U.S. President Joe Biden’s key messages to Britain in his first meeting with Johnson, Rabobank’s Foley also said.

They “were more about the special relationship between the U.S. and the UK and less about issues related to the N. Ireland protocol,” she said.

Biden and Johnson met in Cornwall, southwest England, before the start of the G7 Summit on Friday.

Sterling slips after record UK GDP fails to impress

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

LEAVE A REPLY

Please enter your comment!
Please enter your name here