Sterling remained strong despite British economy’s problems

The British pound was steady on Friday. The country was in a tight pandemic lockdown for a month. As official data showed on Friday that caused a sharp decline. However, Sterling managed to stay strong thus far.

According to reports, Britain’s economy shrank by a record 20.4% from March to April. Investors hope that this number is the bottom of the crash before a long and slow rebound. Despite the optimistic outlook, the Sterling traded flat at $1.2606. It fell by 0.1% against the Euro at 89.79 pence.

Meanwhile, the Euro edged up slightly against the U.S. dollar near the three-month high it hit earlier in the week. The currency increased by 0.1% to $1.1315. It hasn’t traded far from $1.1422, the highest point it reached on Wednesday. Investors stopped from cashing in the latest profits, thus giving the Euro an opportunity to gain.

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What about the risk-off currencies?

The risk-off currencies, such as the Australian or New Zealand dollars, rebounded on Friday, trading higher against the safe-haven, greenback. Before that, they plummeted down during the Asian trading session. But the currencies managed to find footing soon.

The Aussie soared by 0.4% to $0.6881 in the Asian session, after dropping to a 10-day low of $0.6799.

The Nordic currencies rose as well. And the oil-sensitive Canadian dollar traded up by 0.3% at $1.3585 at last. However, the Norwegian crown was the biggest mover, surging by 0.6% to $9.5665 against the U.S. currency.

While economic data continues to point that the economic wounds due to the pandemic are behind us, and the authorities worldwide keep easing their lockdown measures, markets would treat the retreat as a corrective phase of a more extensive recovery – stated Charalambos Pissouros, the senior market analyst at JFD Group.

He also noted that analysts still see decent chances for safe havens to come under renewed selling interest or for equities and other risk-linked assets to recover again.