Sterling nears three-week high on strong data

Caitlin Morrison
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The pound is strengthening ahead of Janet Yellen's speech this afternoon (Source: Getty)

Sterling hovered near a three-week high against the dollar this morning, after receiving a boost from strong economic data which showed investment was moving in the right direction.

The pound was on track for its best weekly performance in six weeks against the euro, having hit a two-week high on Wednesday, although at pixel time it had dipped slightly.

Meanwhile, sterling rose to $1.3215, not far from its three-week high of $1.3263 struck earlier this week, and on course for a 1.1 per cent weekly gain.

The UK economy grew by 0.6 per cent in the second quarter of the year, according to numbers from the Office for National Statistics, and was up 2.2 per cent year-on-year, with business investment up 0.5 per cent in the quarter.

"UK data continues to stifle the scaremongers," said Alex Lydall, senior sales trader at Foenix Partners.

"While this data-set is clearly not post-Brexit itself, solid figures running into the referendum and also strong business investment figures suggests the whole debacle perhaps wasn't as bad as previously thought around the month of June."

Focus will now turn to a speech by the chair of the Federal Reserve, Janet Yellen, due at 3pm UK time. Yellen is expected to provide clarity on whether US interest rates will rise this year.

"Dovish signals from Yellen will see traders start to rule out any chance of a near-term US rate hike and could weaken the dollar," said Nawaz Ali, currency strategist at Western Union.

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