After a triumphant week, Sterling is a touch softer going into Friday. With a lack of liquidity in the market due to the Lunar New Year holiday shutting down many Asian centres, price action is limited. This morning we also had the latest UK GDP figures – which showed GDP contracted 9.9% last year, marking the largest annual fall on record. The data shows that UK GDP grew by 1% in the fourth quarter due to a recovery in government consumption and business investment as COVID-19 restrictions eased. Despite two consecutive quarters of growth, UK GDP is still 7.8% below the level recorded in Q4 of 2019.
GBPUSD was unable to keep its recent upward trend going yesterday. After opening at 1.3831, cable went on to close at 1.3819. It is worth noting that the rate continued to depreciate overnight, and the pair is now trading below the 1.38 handle.
GBPEUR is also trading lower this morning after slipping in Thursday’s session. The pair opened at 1.1401 and closed at 1.1396.
EURUSD once again spent the day in a tight range. The pair started Thursday at 1.2124 and was unable to gain any traction, closing at 1.2126.
Today’s economic calendar is packed with notable releases. Along with the UK GDP figures, also released was Balance of Trade, Construction Output, Goods Trade Balance, Industrial Production and Manufacturing Production. Impressively, all these figures (bar Construction Output) came out better than forecasted. Then in the afternoon at 15:00 from the US we have the Michigan Consumer Sentiment, followed by a speech from Fed member Williams.
