The Pound edged higher on Wednesday after the latest GDP figures came in better than expected.
The Office for National Statistics found that the UK economy had contracted by 1.5% during the first quarter which was lower than the prediction of 1.6%. With March showing a stronger-than-expected growth, it has raised hopes that GDP will see a record surge in 2021. So, at the close of trading, the currency finished at 1.1647 against the Euro and 1.4062 against the US Dollar according to the Foreign Exchange Market.
It was a defensive day for the Euro as the single currency struggled with its negative correlation with the US Dollar. However, these losses were capped as the economic projections from the European Commission saw growth forecasts raised following the improvement in the vaccine rollout.
During the session yesterday, the US Dollar surged after the latest US consumer price index indicated that domestic inflation had soared to 4.2% in April – the highest level since 2008. This was an increase that was higher than expected and that resulted in US investors revising their interest rate expectations.