Sterling Declines as UK Economy Shrinks

The Great Britain pound extended its losses today after the report showed that Britain’s economy shrank more than predicted in the fourth quarter of the last year.

Britain’s gross domestic product contracted by 0.6 percent in the fourth quarter of 2010, revised down from the previously estimated fall of 0.5 percent. Chris Huddleston, a trader at Investec Bank Plc, said that the decline was caused by the profit-taking by traders and didn’t affect the expectations of higher interest rates.

GBP/USD went down from 1.6135 to 1.6040 as of 15:01 GMT today after rising earlier to 1.6160.

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