Schedule pound to dollar at intervals of 60 minutes
The pound rallied to a two-week high against the dollar on Monday at the start of the week with more data expected to provide further evidence that the UK economy is recovering from its deepest recession in 300 years.
Compared to the broadly weakening dollar, the pound rose 0.3% to $ 1.3888 at 08:35, the highest level since April 6. It was 0.1% lower against the euro at 86.63 pence.
This week, traders will be watching the UK PMI survey as well as labor market data, inflation and retail sales.
“The British pound continues to find support in the downturns and it looks like investors are happy enough to hold their ground amid the reopening of the UK economy in the second quarter,” said Chris Turner, head of global markets at ING.
“Today we have already seen the encouraging April data on Rightmove house prices,” he said.
Promotional UK home prices hit record highs after Treasury Secretary Rishi Sunak spurred the market again by extending tax cuts for home buyers last month, real estate website Rightmove said Monday.
Asking prices jumped 2.1% in the five weeks to April 10, the second time in five years that prices have risen more than 2% month-on-month.
Analysts at ING and UniCredit wrote to clients that the pound sterling could strengthen to $ 1.40 this week.
The pound had a strong first quarter, helped by the rapid roll-out of the COVID-19 vaccination program across the UK and lower expectations of negative interest rates.
As retail stores, barbershops, gyms and pubs reopen in England, analysts expect the UK economy to recover faster than the European Union, which is facing a third wave of infections.
“Current domestic COVID data is encouraging and further relaxation of restrictions will indicate an earlier recovery for the UK economy from the coronavirus crisis,” said Neil Jones, head of foreign exchange sales at Mizuho Bank.