Pound Falls as GDP Shrinks
The Great Britain pound fell today after a government report showed that the UK economy unexpectedly declined in the first quarter of this year, reducing appeal of the nation’s currency.
Britain’s gross domestic product dropped 0.2 percent in the first quarter of 2012, following the drop by 0.3 percent in the previous quarter. Traders were frustrated as analysts predicted a 0.1 percent increase. Gross value added grew 0.2 percent in February on an annual basis, while an advance by 0.6 percent was predicted. The worse-than-expected data added incentive for the Bank of England to ease its monetary policy and reduced demand for the pound. Improving sentiment about the situation in Europe was also negative for the UK currency.
GBP/USD was down from 1.6142 to 1.6085 and GBP/JPY dropped from 131.23 to 130.57 as of 9:21 GMT today.
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Earlier News About the Great Britain Pound:
- Pound Goes Higher vs. Euro as Future of Europe Still Uncertain (2012-04-24)
- UK Pound Gains as BOE Prepares to Wind Down Stimulus (2012-04-19)
- Will the Great Britain Pound Strengthen Further? (2012-04-13)
- Pound Advances with Retail Sales (2012-04-11)
- Risk Aversion Weighs on the UK Pound (2012-04-10)