The Pound Sterling traded close to a 12-week peak versus the US Dollar on growing expectations that Britons would choose to stay in the E.U. Also providing some support to the Cable was the latest growth data for the UK which showed that, at least preliminarily, GDP for the first quarter remained flat at 2.1% (year-over-year) against expectations of a decline to 2.0%. On a quarter-over-quarter basis, the reading hit the consensus forecasts with a fall of 0.4%. Analysts say that the subdued data would suggest that the Bank of England will continue to maintain its current interest rate pattern of a low rate environment.
As reported at 10:49 am (BST) in London, the GBP/USD was trading at $1.4586, a gain of 0.09%; the pair has ranged from $1.4549 at the low end to a peak of $1.4619 in today’s trading band. Yesterday, the pair was trading near to a 12-week peak at $1.460; the pair has tumbled sharply over the past 6 months but did recover about 2.4% this month. The EUR/GBP was down 0.02% to trade at 0.7752 Pence; the pair’s daily trading range was 0.7744 Pence to 0.7787 Pence.
Brexit Fears Still Exist Despite Latest Polls
Though the latest polls suggest that Britain will remain in the EU, caution is still being exercised among investors. A vote for Britain’s withdrawal would likely result in a significant fall in the Pound’s value which would mean that it would cost significantly more to repay sovereign debt. The outcome would likely throw cold water on the UK’s still fragile economic recovery.