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Pound (GBP) Rises as UK GDP is Revised Up for Last Quarter of 2020

Published: 31 Mar at 3 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, France, Germany,

Pound (GBP)

The Pound (GBP) rose today after the latest UK GDP report for the fourth-quarter of 2021 was revised up.

However, this was not enough to fully bolster confidence in the UK economy, as the figure had only been slightly revised up to 1.3% from the record slump of 1%.

Today also saw UK House Prices dip by 0.2% in March, leaving some GBP investors more cautious about the outlook for the nation’s economy.

Robert Gardner, Nationwide’s Chief Economist, commented on the data:

‘Given that the wider economy and the labour market has performed better than expected in recent months, the slowdown in March probably reflects a softening of demand ahead of the original end of the stamp duty holiday before the Chancellor announced the extension in the Budget.’

Euro (EUR)

The Euro (EUR) struggled today as French President Macron is now under pressure to lockdown the nation as Covid-19 hospitalisations continue to soar.

French news site France24 reports:

‘Macron has drawn fire from opposition parties and some medical experts for refusing to impose a nationwide lockdown sooner, with many now expecting that schools will have to be closed in the hardest-hit regions to stem the outbreak.’

Much of Europe has struggled to limit the third-wave of Covid-19 infections, leaving Eurozone markets concerned about the bloc’s economic outlook as key economies prepare to enter lockdown.

In Eurozone economic news, today saw the release of the latest German Unemployment Rate report for March, which fell by -8 thousand.

Consequently, the Euro exchange rate has struggled as the outlook for the Eurozone’s largest economy continues to look bleak due to rising cases of the coronavirus.

US Dollar (USD)

The US Dollar (USD) has benefited from its safe-haven status today as concerns continue to grow over rising Covid-19 cases throughout Europe.

As a result, global risk sentiment has suffered as several of the world’s largest economies are struggling from rising numbers of the virus, sparking off concerns of another period of lockdown restrictions.

Meanwhile, rising US Treasury yields as buttressing the US Dollar exchange rate as more details emerge over President Joe Biden’s infrastructure stimulus plan.

Consequently, confidence in the US economy – the largest in the world – continues to grow.

Canadian Dollar (CAD)

The oil-sensitive Canadian Dollar (CAD) fell today following a near-2% drop in WTI crude oil prices.

Coming up today, CAD investors will be monitoring the latest GDP figures. Any signs of improvement would uplift Canadian Dollar exchange rates.

Australian Dollar (AUD)

The Australian Dollar (AUD) has benefited from positive Chinese PMI data, which all printed above expectations.

With China – the world’s second-largest economy – showing signs of improvement, the ‘Aussie’ has benefited from a mixture of risk-on trade and growing confidence for Australia’s economy.

New Zealand Dollar (NZD)

The New Zealand Dollar (NZD) suffered today, however, as growing strength of the US Dollar has limited the appeal of the risk-sensitive ‘Kiwi’.

As of Wednesday, 31st March 2021, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1755, GBP USD exchange rate was 1.3784, GBP AUD exchange rate was 1.8146, GBP NZD exchange rate was 1.9742, GBP CAD exchange rate was 1.7313, and GBP CNY exchange rate was 9.0324.
Dominic Lee About Author: (474 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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