Sterling pushed through 1.87 this afternoon peaking at 1.8737 before the Aussie recovered a fraction late afternoon. Indeed sterling has had a strong day against all majors following news that the International Monetary Fund (IMF) has sharply increased its growth forecast for the UK economy. It now expects the economy to grow 2.4% this year – faster than any other major European economy – against its previous forecast of 1.9%. In 2015, it expects growth of 2.2%.
The strong data may continue tomorrow with unemployment data forecast to show an improvement from 7.4% to 7.3% something that should lend support to the pound. Yes you could argue this has been priced in but I still believe the pound will push towards 1.88. Tomorrows Bank of England minutes should also be watched with interest as this will give insight as to how the nine members of the Monetary Policy Committee voted in relation to interest rates. With the data sets in the UK showing signs of improvement (manufacturing figures earlier in the month the exception to the rule) some analysts have predicted that the central bank may opt to raise interest rates sometime this year and not 2015 or even 2016 as previously forecast. For this reason tomorrows minutes could make for interesting viewing and I for one believe the pound is in for another good day tomorrow.
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