GBP/USD Near Five Year High at 1.7040

The pound approached the highest in more than five years versus the dollar as analysts said the Bank of England’s new measures to cool the housing market wouldn’t derail the economy.

Sterling rose versus 13 of its 16 major peers before a report tomorrow that analysts said will show the British economy expanded 0.8 percent in the three months through March. The BOE’s Financial Policy Committee led by Governor Mark Carney introduced measures to limit riskier home loans and consumer debt. Carney said earlier this month that rising mortgage debt could threaten the recovery. U.K. government bonds were little changed.

“Sterling gained some support because the measures are in line with indications we got from Carney that the FPC’s approach would be slow and gradual,” said Ian Stannard, head of European currency strategy at Morgan Stanley in London. “It’s not going to have an impact on monetary policy and rate-hike expectations are going to remain in place.”

Bloomberg

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