LONDON (Reuters) – The pound climbed further against the dollar on Friday after enjoying its best week since September and its sixth weekly rise in a row, amid increased optimism around Brexit and the economic backdrop.
Britain’s economy unexpectedly picked up speed in the last three months of 2017, data showed earlier on Friday, adding to the view that the hit from the Brexit vote in June 2016 was not as bad as some had expected.
Sterling, already up before the data, rose further for a one percent rise on the day at $1.4289 before giving up those gains to trade at $1.4178 by 1700 GMT, still up 0.3 percent on the day. For the week, the pound is up more than 2 percent.
It marks the British currency’s best run since mid-2012.
Against the euro, the pound traded flat at 87.65 pence.
Gross domestic product grew by 0.5 percent in the three months to the end of December, faster than analyst expectations of 0.4 percent, official data showed.
That was the fastest pace of quarterly growth last year, although the Office for National Statistics said the big picture remained one of slower and more uneven expansion in Britain.
“This is further confirmation that the economy has outperformed expectations since the vote,” London-based MUFG strategist Lee Hardman said.
MUFG has had a bullish view on the pound for some time, with a year-end target of $1.47 and about 85 pence per euro.
The pound has enjoyed a strong rally this year and is up around 5 percent against the U.S. currency, helped by a broad-based dollar sell-off that intensified this week until U.S. President Donald Trump on Thursday said he ultimately wanted a strong greenback.
Some of the world’s biggest investors have bought into the notion that sterling can move higher on the back of hopes that Britain will secure itself more favourable terms when leaving the European Union and a better-than-expected domestic economic performance.
Reporting by Tommy Wilkes; Additional reporting by David Milliken and Julien Ponthus; Editing by Gareth Jones