Pound Sterling gains on strong UK Q1 GDP report
The Pound Sterling (GBP) extends its upside to 1.2540 in Friday’s early New York session as the United Kingdom Office for National Statistics (ONS) posted strong preliminary Q1 Gross Domestic Product (GDP) numbers. The agency showed that the economy expanded at a strong rate of 0.6% against expectations of 0.4% after contracting by 0.3% in the last quarter of 2023.
Strong UK GDP growth has suggested that the technical recession observed in the second half of 2023 was shallow. Annually, the UK Q1 GDP expanded by 0.2%, the same pace at which it was contracted earlier. Investors anticipated a stagnant growth on a year-over-year basis. Meanwhile, the monthly GDP growth for March was 0.4%, stronger than the consensus of 0.1% and the prior reading of 0.2%, upwardly revised from 0.1%. Read more...
GBP/USD rises to near 1.2540, driven by higher UK GDP
GBP/USD edged higher to near 1.2540 during Asian hours on Friday, buoyed by the release of higher-than-expected UK Gross Domestic Product (GDP) data for the first quarter. GDP (QoQ) rose by 0.6%, reversing the previous quarter's decline of 0.3%, surpassing expectations of a 0.4% increase. Additionally, GDP (YoY) increased by 0.2%, rebounding from the previous decline of 0.2%.
However, the Pound Sterling (GBP) encountered challenges following the Bank of England’s (BoE) decision to maintain the interest rate at 5.25% on Thursday. Reuters reported that BoE Governor Andrew Bailey mentioned during the post-decision press conference that "a rate cut next month was a possibility," but he intends to wait for inflation, activity, and labor market data before deciding. This has raised the prospect of future rate cuts, putting pressure on the British Pound and weakening the GBP/USD pair. Read more...
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