The Pound Sterling held close to a 1-week trough versus the US Dollar as FX traders await data that would support a Bank of England rate hike in May. The latest economic data had helped to provide clarity, with the first reading of 4th quarter growth coming in with unexpectedly strong numbers. However, the second GDP reading, released earlier today, did little to provide certainty; the Office of National Statistics reported that GDP growth was at 1.4% (year-over-year) and 0.4% (quarter-over-quarter), short of analysts’ predictions of 1.5% and 0.5%, respectively.
As reported at 10:50 am (GMT) in London, the GBP/USD was trading at $1.3895, down 0.09%; the pair earlier hit a session low of $1.3870 while the peak is at $1.3919. The EUR/GBP is trading at 0.88471 Pence, a gain of 0.2%; the pair hit a session high of 0.88563 Pence while the trough is at 0.88230.
Forecasts Don’t Dim Sterling Outlook
Despite the GDP figures which are still preliminary until the final reading, most analysts expect the Bank of England to raise rates in the coming months. On Wednesday, the BoE’s chief economist reported that the demand and inflation risks were both to the upside. Further, Andy Haldane said that he believed that the UK economy was likely to surpass the central bank’s most recent forecasts. FX market players are increasingly confident of a May rate increase to 0.75% with a 70% likelihood of another later tin the year, likely to a 1% benchmark rate.