LONDON, May 12Reuters The pound held steady above 1.41 on Wednesday after UK GDP data for March beat market expectations, keeping investors optimistic about the UKs economic recovery from the pandemic.
Sterling jumped to a twomonth high on Monday this week due to a combination of dollar weakness, market relief over Scottish election results, lockdown easing measures, and the Bank of England raising its forecast for economic growth.
It has held on to these gains since then, reaching as high as 1.4167 on Tuesday, and was at 1.4147 at 0752 GMT on Wednesday, up 0.1 on the day.
Versus the euro it was up 0.1 at 85.84 pence per euro, close to its strongest in a month.
Britains economy grew by a strongerthanexpected 2.1 in March from February, gathering speed for what is expected to be a sharp bounceback this year after its deep coronavirus slump of 2020.
Although analysts said the datas immediate market impact was limited by the fact that it referred to a period when stricter lockdown restrictions were still in place, it helped support the market expectation for a strong recovery in the UK.
The data today is consistent with a positive outlook for the pound, MUFG head of research Derek Halpenny said in a note to clients.
GBP has underperformed in Q2 todate, being the 2nd worst performing G10 currency. We see scope for catchup with the markets concluding the BoE outlook is too pessimistic leading to sooner taper speculation and the prospect of shortterm rates drifting…