The Pound was little changed against its major peers on Friday as eagerly awaited gross domestic product data widely matched economist expectations.
Against the US Dollar the Pound was holding at a five-year high of just above the 1.70 level, against the Euro the currency was hovering just under the psychologically key 1.25 level.
According to the Office for National Statistics its final reading for quarter on quarter growth matched market expectations for a figure of 0.8%. On an annual basis GDP rose by 3.0%, just short of economist forecasts for a figure of 3.1%.
Other data released on Friday offered some support to the Pound as it showed that the UK’s economic recovery is beginning to broaden.
A separate report showed that the UK’s current account deficit narrowed to £18.5 billion in the first quarter of 2014, a fall from the previous figure of £23.5 billion. The narrowing was a bit less than expected by economists. Analysts had expected the current account deficit to narrow to £17.5 billion in the first quarter.
Another positive from the day’s data releases was that investment in the UK climbed by 5% in the first quarter. The increase marks the fifth consecutive rise and the longest run of expansion for 16 years. A separate report showed that consumer spending also increased by 0.8% marking a tenth consecutive increase.
The data shows that the UK economy is now just 0.6% smaller than its peak seen in the first quarter of 2008.
Bank of England Governor Mark Carney said; “The economic recovery has proceeded better than we had expected. The economy is performing and is the strongest of all the advanced economies.”
The main piece of data due for the UK and Pound next week will be Tuesday’s Markit/CIPS Manufacturing PMI report.
Pound (GBP) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.7026 ,
Pound Sterling,,Euro,1.2499 ,
Pound Sterling,,Australian Dollar,1.8084 ,
Pound Sterling,,New Zealand Dollar,1.9437 ,
US Dollar,,Pound Sterling,0.5872 ,
Euro,, Pound Sterling ,0.7996 ,
Australian Dollar,, Pound Sterling ,0.5527 ,
New Zealand Dollar,,Pound Sterling,0.5150 ,
[/table]
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