British Pound Breaks Above 2.01

After hitting a low of 1.9653 last week, the British Pound has rallied close to 500 pips to end the week above 2.01. Recent UK economic data has been encouraging, which is part of the reason why the British pound has staged such a strong recovery.

Although second quarter GDP was left unchanged at 0.8 percent, private consumption and government spending was revised upwards, which helped to cover the reversal in fixed capital spending. Whether or not the Bank of England will still raise interest rates at the end of the year will be dependent upon how data fares in the weeks to come. UK markets are closed on Monday, but we are expecting a number of housing market related reports this week in addition to the CBI distributive trades survey and consumer confidence.