After slipping from its $1.41 perch on Wednesday, the British Pound Sterling has regained some of its ground, stabilizing at a value a little over $1.41 on Thursday morning. This comes after the latest U.S. inflation data inflated the dollar’s value.
The pound’s strong position on Wednesday was largely secured by the U.K.’s recently released GDP figures, which exceeded prior expectations. This increase was soon set off, however, by U.S. data that showed how consumer prices have increased in April; a revelation that caused investors to exercise more caution and thus push up the dollar’s value.
Despite the latest economic revelations in the U.S., investors remain widely optimistic about the United Kingdom’s economic recovery following the coronavirus pandemic, as well as the continued strength of the British pound. On Monday, the pound enjoyed its best say since January following the U.K. government’s decision to further lift lockdown restrictions.
By the end of trading on Wednesday, the pound was the best-performing G10 currency after the Canadian dollar, which went up 3.2% against the U.S. dollar year-to-date.
Another factor for success has been the Bank of England’s decision to taper its bond purchasing program, starting last week. According to Bank of England policymaker Jonathan Haskel, there is little concern with regards to medium-term inflation, however the damage done to the nation’s productivity by the coronavirus pandemic remains in focus.
