Yesterday’s surprisingly strong economic figures helped the pound to zip past 12-month highs against the US dollar this Friday.
The latest gross domestic product data showed that Britain’s economy grew by 1.4% year-on-year in May, outstripping the expected growth rate of 1.2% and doubling April’s 0.7% gain.
Markets have taken this as a hawkish sign for interest rate policy, which should help keep Cable elevated in the near term.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: “In the UK, the pound was already bid yesterday morning after stronger-than-expected growth data helped traders scale back the expectation of an August cut from 70% to a coin toss.
“Combined with rising hawkish voices at the Bank of England, waning political risks and softening US dollar, we could see cable make an attempt on the $1.30 level.
“But the fact that the BoE hawks cry louder doesn’t mean that the doves are not around.”
At the time of writing, the GBP/USD pair was swapping for 1.2912.