Pound US Dollar Exchange Rate Soars to New 34-Month High on Upbeat UK GDP Figures

Pound Strengthens on Upbeat GDP Figures

After a slow start, the Pound (GBP) was able to strike higher against the majority of its peers on Friday following the publication of the UK’s latest GDP figures.

These revealed that the UK economy expanded at a faster-than-expected pace in the last quarter of 2020, which should see the UK avoid a double-dip recession.

However, the upside in Sterling was tempered somewhat by the accompanying annualised figures, which reported the UK suffered a record slump in GDP in 2020 as a whole.

GBP exchange rates have continued strengthening so far this morning, with the Pound US Dollar exchange rate holding above $1.39 and GBP/EUR hitting a nine-month high.

Turning to the week ahead, the focus for GBP investors looks to be on the UK’s lockdown timetable, with the Pound buoyed by hopes that restrictions could start to be eased over the next month or two.

Euro Slumps amid USD Rebound

The Euro (EUR) was on the defensive at the end of last week, as the single currency’s negative correlation with the US Dollar (USD) saw it weaken as the US Dollar rebounded.

Further undermining EUR exchange rates were ongoing concerns over the EU’s slow vaccination rollout, with increasing risk of much of Europe facing extended lockdowns as a result.

Coming up today, we may see the publication of the Eurozone’s latest industrial production figures put some pressure on the Euro this morning as economists forecast factory output across the bloc contracted in December.

US Dollar Firms as US Treasury Yields Rise

The US Dollar (USD) mounted a recovery on Friday, rebounding in line with a sharp upswing in US Treasury yields, as well as a souring of market sentiment.

However, tempering these gains was the publication of the University of Michigan’s consumer sentiment index, which came in below expectations this month.

Looking ahead, USD investors will look to US stimulus developments and the publication of the latest US retail sales figures for fresh impetus this week.

Canadian Dollar Muted as Oil Prices Stall

The Canadian Dollar (CAD) was stuck in a narrow range at the end of last week’s session, with the commodity-linked ‘Loonie’ struggling for direction as oil prices stalled.

Australian Dollar Rallies amid Cautious Optimism

The Australian Dollar (AUD) ticked higher during Monday’s Asian trading session, with the risk-sensitive ‘Aussie’ receiving a boost from the continued acceleration in coronavirus vaccinations around the globe.

New Zealand Dollar Muted amidst Auckland Lockdown

The New Zealand Dollar (NZD) failed to capitalise on the improving market mood during last night’s trading session, as news that Auckland had been placed in a snap lockdown undermined the ‘Kiwi’.

Matthew Andrews

Contact Matthew Andrews


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