Pound Spikes Higher as UK GDP Beats Estimates Despite COVID-19

The  Sterling pound today spiked higher against the  US dollar after the  release of  multiple positive UK fundamental reports including positive GDP data earlier today. The  GBP/USD currency pair rallied higher as  investors reacted to  the  positive reports, which indicated that the  British economy fared surprisingly better than expected during Q1 2020.
The  GBP/USD currency pair today spiked from an  opening low of  1.2251 to  a  high of  1.2301 after the  releases before giving up some of  its gains to  trade lower at  the  time of  writing.
The  currency pair spiked higher despite the  deepening coronavirus crisis in  the  UK as  the  number of  deaths caused by  the  pandemic crossed 50,000. Rishi Sunak the  UK Chancellor of  the  Exchequer yesterday announced that the  British government would extend its costly furlough scheme to  October. The  British government is currently paying over 80% of  the  salaries of  about 7.5 million workers who have lost their jobs. The  release of  the  preliminary UK GDP report for  Q1 indicating that the  British economy contracted by  2.0% in  Q1 as  opposed to  the  expected 2.5% contraction boosted the  pair. The  monthly GDP print also beat analysts estimates.
According to  the  Office for  National Statistics, the  UK’s industrial production fell 4.2% in  March versus the  expected 5.6% decline, also boosting the  cable. However, the  country’s trade deficit expanded to  6.67 billion in  March, which was higher than expected, dragging the  pair lower.
The  currency pair’s future performance is likely to  be affected by  COVID-19 headlines and  US dollar dynamics.
The GBP/USD currency pair was trading at 1.2280 as at 09:24 GMT having fallen from a high of 1.2301. The GBP/JPY currency pair was trading at 131.41 having dropped from a high of 131.80.
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