UK GDP Underwhelms and Drives Pound Down

Following the news that the UK’s preliminary GDP estimate came in lower than expected on Thursday, the Pound fell back. Despite this being a record increase in quarterly growth it doesn’t hide the fact that the economy in the UK is 8.2% smaller than before the pandemic hit. This was not enough to impress investors although they will have an eye on the ongoing Brexit talks and the speech from the Bank of England. So, after trading, the currency finished the day at 1.1116 against the Euro and 1.3121 against the US Dollar according to the Foreign Exchange Market.

The Euro edged higher on Thursday, clawing back some of its losses following the hope of a vaccine bringing the pandemic to an end. However, gains were held back by the lack of pleasing data from the Eurozone with industrial production contracting during September.

It was similar news for the US Dollar as market sentiment was pushed down by concerns over increasing coronavirus cases and the political problems that the country is facing. Despite this, the US Dollar lost some of its appeal after domestic inflation underwhelmed pushing US Treasury yields lower. It’s likely that the US Dollar is going to remain supported today, with coronavirus cases placing pressure on market sentiment.

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