The Pound has continued to build on its positive momentum against both the Euro and Dollar. This morning, UK GDP showed that the economy shrank by 2.6% in November which was caused by increased lockdown restrictions. However, this was better than a 4.6% contraction that was forecast. Both UK industrial and manufacturing production disappointed the market though which limited any further gains.

The ECB Monetary Policy Meeting Accounts published yesterday showed that members were concerns about the strength of the Euro as it could have a negative impact on inflation. German economy minister Altmaier believes that economic growth will be weaker than expected this year for Europe’s largest economy which has also contributed to a weaker Euro.

US unemployment claims disappointed the market with a reading of 965K compared to 785K that was forecast. This underlined the need for further fiscal stimulus to be provided by the incoming Biden administration. Biden has announced that he will be looking to introduce a package worth $1.9tn to help households and businesses. Overall, this led the Dollar to remain weak against the Pound, although the greenback has made some gains against a weaker Euro.