GBP/USD remains depressed near 1.3800 mark, moves little post-UK macro releases

The GBP/USD pair maintained its offered tone around the 1.3800 round-figure mark and had a rather muted reaction to the UK macro releases.

The pair extended the previous day's retracement slide from the vicinity of 34-month tops and remained depressed for the second consecutive session on Friday. A softer tone surrounding the equity markets benefitted the US dollar's perceived safe-haven status and was seen as a key factor exerting pressure on the GBP/USD pair.

The pair moved little after data released from the UK showed that the domestic economy recorded a stronger-than-expected growth of 1.2% in December. Adding to this, the preliminary reading of the fourth quarter GDP also surpassed expectations and came in at 1.2%, though marked a notable slowdown from the previous quarter's 16% rise.

Moreover, the UK Trade Balance showed that deficit fell more-than-anticipated, to £14.315 billion in December from £16.012 billion previous. Separately, the UK Manufacturing and Industrial output missed market expectations and increased by 0.3% and 0.2%, respectively. The data, however, did little to provide a fresh impetus to the sterling.

That said, the downside is likely to remain limited amid optimism that the UK's lead in terms of the coronavirus vaccination drive could facilitate an earlier easing of lockdown restrictions. Apart to this, diminishing odds for any BoE interest rate cut could further underpin the British pound and extend some support to the GBP/USD pair.

Technical levels to watch