GBP/USD Near 1.0550 as Pound Posts Strong Monthly Advance

The pound posted its biggest monthly gain versus the dollar since October 2011 as a report showed British banks granted more loans for homes in March than analysts predicted, adding to signs the economy is improving.

Sterling fell versus the euro, extending its third monthly drop this year, after a report showed U.K. consumer confidence unexpectedly declined in April. Futures traders decreased their bets that the pound will weaken against the dollar, figures from the Washington-based Commodity Futures Trading Commission showed last week. U.K. government bonds fell as the Debt Management Office sold 50-year inflation-linked gilts at a record-low yield.

“If you look at speculative positions, accounts are still fairly short the pound,” said Kasper Kirkegaard, a senior currency strategist at Danske Bank A/S (DANSKE) in Copenhagen, referring to a bet that the price of an asset will fall. “That’s been gradually scaled back and we can see potential for it to go even higher in the short term.”


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