Pound Stumbles As UK Economy Enters Technical Recession

UK pound stumbled against the dollar on Thursday in immediate reaction to data that showed UK economy contracted by 0.3% in the fourth quarter of 2023. Investors anticipated a deceleration of growth of 0.1%. The UK economy contracted for the second straight quarter in a row indicating a technical recession. GBPUSD came under severe selling pressure post the data and hit a low of $1.2544. Meanwhile, broad dollar strength overseas on reduced expectation of an early Federal rate cut is also keeping the pair under pressure. The dollar index which measures the value of the USD relative to a basket of global currencies, retraces from a three-month high of nearly the 105.00 mark and hovers around 104.54. The US Treasury yields edge lower, with the 10-year yield standing at 4.26%. GBPUSD pair is sharply below January monthly close of $1.2715 and is seen headed for further decline. On the NSE, GBPINR is quoting along the flat line at 104.28 after hitting an intraday low of 104.22.

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