Sterling climbed to its highest point against the dollar this year, amid a backdrop of positive UK economic data and a weaker dollar. The pound increased by 0.1% to $1.25775, marking its strongest level since December 30, after UK GDP figures showed unexpected growth, uplifting confidence in the British economy.
Market sentiment was bolstered by Thursday’s report indicating a 0.1% growth in Britain’s economy during Q4. “The pound was buoyed by a broader risk-on mood and an upside surprise in GDP,” said Matthew Ryan, head of market strategy at Ebury. Still, growth challenges persist, including elevated inflation and a high tax burden.
The pound’s ascent was also aided by a diminished dollar, following reassuring U.S. producer price figures and deferred tariff threats, stimulating hopes of negotiation. Meanwhile, the pound remained stable against the euro. Investors anticipate further easing from the Bank of England, with looming labour reports likely to influence future rate decisions.
(With inputs from agencies.)
