Harsher lockdowns put downward pressure on the GBP; UK GDP exceeds expectations.
The pound sterling continues to slide against the US dollar as the UK remains in lockdown as a result of another mutation of the coronavirus. While Forex strategists point out that the GBP/USD is moving away from the recently struck 10-day low, they point out that the Brexit discussions are likely to continue to weigh on sterling, with mere days left before the transition period ends. Some recent news reports suggest that leadership in the EU and the UK may be close to reaching a compromise on one of the key sticking points: fisheries.
In London trading at 11:22 am, the GBP/USD was trading lower at $1.3416, down 0.2387%, off the session peak of $1.34754. The EUR/GBP was higher at 0.9019 pence, a gain of 0.1473%; the pair has ranged from a low of 0.90722 pence to a peak of 0.91380 pence. The GBP/JPY was lower at 138.7610 yen, down 0.1641%, off the session trough of 138.169 yen.
Any support the pound sterling received can also be attributed to the news that the 3rd quarter GDP was better than expected. The Office of National Statistics reported earlier that on a quarterly basis, the GDP reading came in at 16%, better than the 15.% that analysts had predicted, which was also the reading of the previous period. On an annualized basis, though in negative territory at -8.6%, the GDP was better than the -9.6% that had been predicted. Total business investment for the period also improved to 9.4%, against a forecast of 8.8%.