The UK economy expanded by 1.3% in Q4 2020, being revised up from previous estimates of 1%, according to the ONS
The Pound Australian Dollar (GBP/AUD) exchange rate is trading in a narrow range this morning, as markets react to the UK’s latest Gross Domestic Product (GDP) figures.
The GBP/AUD exchange rate is trading at around AU$1.8083, virtually unchanged from this morning’s opening rate.
The Pound (GBP) is holding its ground against the Australian Dollar and the majority of its other peers this morning, as GBP investors welcome the UK’s latest GDP figures.
According to data published by the Office for National Statistics (ONS), the UK economy expanded by 1.3% in the final quarter of 2020, being revised up from previous estimates of 1%.
Much to the relief of GBP investors, the release confirms that the UK will have avoided a double-dip recession this winter.
However, the finalised figures also saw the contraction of growth in Q2 revised as well, with the ONS suggesting that the UK economy slumped by a record 19.5%, against previous estimates of a 19% decline.
Jonathan Athow, deputy national statistician for Economic Statistics at the ONS, said: Our revised quarterly figures show the economy shrank a little more than previously estimated in the initial stages of the pandemic, before recovering slightly more strongly in the second half of last year.
These new estimates paint the same overall picture as before, with historically large falls in GDP in the spring, followed by a recovery in the summer and autumn, he said.
All in all, this saw the UK economy contract 9.8% in 2020, slightly better than the 9.9% slump initially forecast but still the largest slump on record.
Meanwhile, the Australian Dollar (AUD) has found some support this morning due to a pullback in the US Dollar (USD).
A modest correction in the US Dollar following a drop in US Treasury yields overnight, has offered some space for the ‘Aussie’ and other risk sensitive currencies.
This has also allowed the Australian Dollar to build on the modest gains made overnight in the wake of China’s latest PMI figures, which printed above expectations in March and reflected well on the China-proxy ‘Aussie’.
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