GBP/USD at 1.5970 on Growth Bets

The pound strengthened from near a four-week low against the dollar before reports this week that economists said will add to signs Britain’s growth is gaining momentum, boosting demand for the currency.

Sterling rose the most in a week versus the greenback as talks on raising the U.S. debt ceiling hit an impasse before the government’s borrowing authority lapses on Oct. 17. Investors should buy the pound and sell U.K. government bonds as the economy recovers, Societe Generale SA said. The U.K. jobless rate was 7.7 percent in the quarter through August, matching the lowest level since 2009, according to a Bloomberg News survey before the report is released on Wednesday.

“Unemployment is the most important piece of U.K. data this week,” said Steve Barrow, head of Group-of-10 research at Standard Bank Plc in London. “We could easily see the rate falling to 7.6 percent. The risk-reward is to be long of sterling into that data,” he said, referring to a bet the currency will strengthen.

Bloomberg

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