The British pound rallied for the third day in a row against the US dollar, hitting a 7 week high in the process.
Although the pound strengthened across the board, there was little to drive the move other than the weaker US dollar. Ironically enough, Bank of England members testified before the Treasury Committee today and their comments were relatively dovish as central bank Governor King specifically noted that the market is too aggressive in pricing rate increases. The only reason that could explain the sterling’s strength is expectations for tomorrow’s GDP and current account figures. No revisions are expected to the Q1 growth figures but the current account deficit could narrow given the strong trade balance reports for the first quarter.