A mixed day for sterling saw it steady against the euro, have a strong performance against the US dollar which saw the UK currency rise to the highest level since early March but lose ground against the Australian dollar. Sterling started the day trading positively, rising across the board ahead of the release of the first estimate of economic growth for the first quarter of this year. This figure surprised investors, posting only a 0.3% increase as the rate of growth decelerated sharply. Although coming in below the 0.5% expectation, this weakness is likely to be seen as an anomaly short term especially as it was the first estimate which is subject to revision. Sterling fell sharply in the wake of this news, although it swiftly recovered with economists still forecasting another strong year of UK economic growth.
Further disappointing data from the US, this time in the form of the latest consumer confidence figure looks set to compound a poor end to the month for the US dollar, and allowed sterling to push yet further above the 1.50 level.
A relatively quiet day lies ahead for sterling, with housing inflation data for the month of April released early this morning. With little other influential data set to be released from the UK, attention will turn to the US where we have both economic growth data over the previous quarter, and the latest interest rate decision from the Federal Reserve.