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  • Real GDP in the UK contracted by 0.1% in February.
  • Fed took new actions to provide up to $2.3 trillion in loans to support economy.
  • US Dollar Index dropped to fresh weekly lows below 99.50.

After spending the majority of the day below the 1.2450 handle, the GBP/USD pair gained traction during the American session on broad-based USD weakness and climbed to a fresh weekly high of 1.2481. As of writing, the pair was trading a couple of pips below that level, adding 0.78% on a daily basis.

The data published by the UK’s Office for National Statistics on Thursday showed that the real GDP in February contracted by 0.1% on a monthly basis. However, markets largely ignored this reading due to the fact that it was not reflecting the impact of the coronavirus outbreak on economic activity. 

USD selloff intensifies

Later in the day, the Federal Reserve announced that it took additional actions to make $2.3 trillion in loans available to support the economy. Wall Street’s main indexes started the day decisively higher after this announcement and the greenback came under renewed selling pressure.

The US Dollar Index (DXY), which has been staying in a consolidation phase above the 100 handle, fell sharply during the American trading hours to help the pair stretch higher. At the moment, the DXY is erasing 0.7% on a daily basis at 99.45.

Meanwhile, the US Department of Labor said 6.6 million Americans applied for unemployment benefits during the week ending April 4th but this reading did little to nothing to impact the market sentiment.

Technical levels to watch for