Investing.com - The pound extended losses on Friday following weaker than expected growth in the first quarter.
At 09:40 GMT, GBP/USD dropped 0.83% to 1.3803, cable’s lowest level for six weeks.
On Friday, the Office for National Statistics posted the weakest quarterly growth figures since 2012.
The ONS said UK gross domestic product expanded by 0.1% in the first three months of 2018, missing the forecast 0.3% growth and markedly lower than the 0.4% growth seen in the final three months of 2017.
Year-over-year, economic growth expanded 1.2%, missing expectations of unchanged growth from the previous quarter of 1.4%.
According to the ONS, adverse weather in February in March, dubbed the ‘Beast from the East’, was only partly to blame for the economic slowdown. A drop in retail during the period and construction output in January also hampered growth.
The pound reached post-referendum highs last week as a May interest rate hike from the Bank of England looked increasingly likely. Comments from BoE Governor Mark Carney last Thursday dampened rate hike expectations, which sent the pound lower.
The weak growth reading will be a point of consideration for Monetary Policy Committee members and may further lower the chances of a rate hike in May.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.22% to 91.59.
Following the UK GDP data release, EUR/GBP climbed from its day’s lows of 0.8683 to jump 0.64% to 0.8752.
EUR/USD dipped 0.16% to 1.2085. The single currency was weaker on a dovish press conference from Governor Mario Draghi European Central Bank following the ECB monetary policy meeting on Thursday.
Spanish GDP for the first quarter met expectations of 0.7% growth. The euro-zone will release its growth figures from Q1 next week.
Against the safe haven currencies, the pound dropped as much as 0.80%. GBP/JPY was down 0.83%to 150.84, while GBP/CHF was 1.3666, a drop of 0.74%.
The pound also suffered against commodity currencies. GBP/AUD was down 0.84% to 1.8268, while GBP/NZD dropped 0.77% to 1.9556.
GBP/CAD was down 0.73 to 1.7782.
Investors will be watching UK PMI data released next week, while the Bank of England MPC will meet to set interest rates on May 10.