European session review: GBP appreciates despite weak GDP data

GBP rose against its major counterparts in the European session on Thursday, despite the Office for National Statistics' (ONS) report revealing a surprise drop in the UK's economy in February, even before the implementation of the measures to combat the spread of the coronavirus.

According to the report, the UK's GDP edged down 0.1 percent m-o-m in February, reversing the January increase. Economists had forecast a 0.1 percent m-o-m growth. The service sector was flat m-o-m in February after rising 0.1 percent m-o-m in January. Meanwhile, the industrial production rose 0.1 percent m-o-m driven by a 0.5 percent m-o-m gain in manufacturing. Construction output dropped 1.7 percent m-o-m as wet weather and flooding hampered house building. In y-o-y terms, the economy expanded by

In three months to February, GDP grew 0.1 percent, after being unchanged in three months to January. The was slightly below economists' forecast for a 0.2 percent expansion.

Another report from the ONS showed that the UK's trade deficit widened from GBP 2.41 billion in January to GBP 2.79 billion, the highest level since May 2019. Exports of goods tumbled 5.8 percent m-o-m in February, while imports surged 3.0 percent m-o-m.

Markets also continue to closely watch updates on the UK PM Johnson's condition. The PM's spokesman said on Thursday: "Boris Johnson has a good night and continues to improve in intensive care at St Thomas's hospital. He is in good spirits." He also added that the PM continues to receive standard oxygen treatment and is able to be in contact with his office if required.