GBP/USD near 1.6750 after Business Investment Surge

The pound advanced against the dollar as data showed a surge in business investment helped the British economy grow for a fourth straight quarter, boosting the allure of the U.K. currency.

Sterling rose versus the euro this week as Bank of England policy makers expressed little concern that the strength of the currency would harm the economy. Officials also said any increases in interest rates from a record low will be gradual and limited. Central bank Chief Economist Spencer Dale told Bloomberg there will probably be a “healthy” split among voting members on when to raise rates. U.K. government bonds advanced for a second week.

“We are seeing a gradual spillover of the recovery from consumption into the investment sector,” said Vasileios Gkionakis, head of global foreign-exchange strategy at UniCredit SpA in London. “This means that the recovery is becoming more sustainable. The pound will benefit from it because you will be talking about a strong and well-balanced economy and the Bank of England is going to hike rates earlier than consensus expects.”

Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.