British Pound:Acquisition Flows Drives Strong Gains in the British Pound

The British pound is up strongly today thanks to a wave of acquisition news and rumors that Syria could abandon its dollar peg and as a result, shift a large portion of its reserves into the British pound.

Strong M&A flow has been a major driver of pound strength for the past year and it seems that even at an exchange rate of 2.00, UK companies are in strong demand. Although UK construction sector PMI for the month of May dropped to 58 from 59.8, a 3.5 year high, the index still remains at relatively high levels. BRC retail sales are on the docket tomorrow. Consumer spending is always an important indicator. It is expected to remain strong in the month of May.