The pound advanced for a fourth day against the dollar, approaching a four-year high, as investors added to bets on faster U.K. economic growth.
Sterling gained versus the euro even as U.K. gross domestic product accelerated in the first quarter at a slower pace than analysts expected. Bank of England Governor Mark Carney said “the recovery is starting to broaden out” and described policy makers as “prudently optimistic,” according to a report on the Bristol Post’s website today. Central bank official Ian McCafferty said “chances of a fully sustained recovery” were at the “highest” for a long time.
“Sterling developed an initial negative response to GDP given that it had come in slightly below market consensus expectations,” said Ian Stannard, the head of European currency strategy at Morgan Stanley in London. “Despite this slight disappointment, the overall growth picture in the U.K. remains relatively robust. We expect the pound to remain supported near-term against the dollar.”
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