- Posted by Shyam Gokani in Uncategorised
- August 26, 2016
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Sterling hovered near a three-week high against the dollar on Friday, supported by solid growth and business investment data that helped offset worries over the impact of Britain’s shock vote to leave the European Union.
The pound was on track for its best weekly performance in six weeks against the single currency, having hit a two-week high yesterday.
Short bets against sterling hit a record high in the week to Aug. 16, and traders said many speculators had been unwinding those positions and booking profits, which helped lift the currency.
Data released on Friday showed gross domestic product rose by 0.6 percent in the second quarter and was up by 2.2 percent compared with the same period last year, in line with preliminary readings and forecasts. Business investment unexpectedly rose between April and June – a period which mostly covered the run-up to the vote on June 23 – compared with the previous three months.
Focus will now turn to a speech by the chair of the Federal Reserve, Janet Yellen that may provide clarity on whether U.S. interest rates will rise this year. Yellen’s keynote address at a global gathering of central bankers is due at 1400 GMT.
Dovish signals from Yellen will see traders start to rule out any chance of a near-term US rate hike and could weaken the dollar.