Pound Falls Against Dollar Despite Upbeat UK GDP Data, Rallies Briefly

Today, the Sterling pound fell against the dollar despite the release of upbeat UK macro data as investor sentiment towards the pound remained bearish. The dollar’s recovery also fueled the GBP/USD currency pair’s decline as investors remained cautious about the UK-EU Northern Ireland border standoff.
Today’s GBP/USD currency pair fell from an initial high of 1.3814 in the Australian session to a low of 1.3776 in the London session but had recouped most of its losses at the time of writing.
The much stronger greenback drove the currency pair’s decline amid an uptick in US Treasury yields. The release of the upbeat UK preliminary Q4 GDP report had a muted impact on the pair. According to the Office for National Statistics, the country’s economy grew 1% in Q4 beating analysts’ estimates of 0.5% growth. The downbeat UK manufacturing production report for December, which came in at 0.3% versus the expected 0.6% drove the pair lower. The country’s industrial production grew 0.2% missing consensus estimates of 0.5% growth. Britain’s December goods trade balance data beat expectations by a slight margin.
Rishi Sunak’s comments regarding his budget priorities following the latest GDP data had a minimal impact on the cable. The cable recovered shortly afterwards as the greenback fell as tracked by the US Dollar Index. The rally in US equity futures also boosted the pair.
The currency pair’s short-term performance is likely to be affected by the University of Michigan consumer sentiment survey’s release at 15:00 GMT.
The GBP/USD currency pair was trading at 1.3791 as at 13:52 GMT after falling from a high of 1.3814. The GBP/JPY currency pair was trading at 144.95, having risen from a low of 144.49.
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Original from: www.earnforex.com