Good morning,

The pound has had a mixed morning to start the last working day of the week, as UK GDP was released at 7:00AM for January. Coming in at a better than expected drop, -2.9% vs a predicted -4.9%, despite the third national lockdown, it has not been enough to see the pound hold ground against the US dollar. Throughout the evening GBPUSD touched the key level of 1.40 before being sold to currently sit at 1.3935 at the time of writing. Versus the euro however, the pound has fared slightly better. 1.17 has not been seen since February last year but the exchange rate continues to knock on the door and currently sits at 1.1678 at the time of writing.

Comments made by Chancellor Rishi Sunak further outline the Government’s commitment to support the economy until the UK is out of the other side of the pandemic. This morning he said, “we will continue to protect jobs and businesses as long as this crisis lasts”. This has previously been taken well by the markets, with increased stimulus being seen as positive for sterling.

Sterling will require another push to get over the key levels mentioned above, which could come in the form of further positive vaccination news.

Have a great weekend.

Jack Nicholls, Relationship Manager.

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