The pound reversed recent losses to gain 0.75% on the aussie yesterday in the wake of some positive economic data, which spurred investor demand.
- A GDP revision showed that British output contracted 0.6% in the second quarter compared with activity in the first three months of 2009, better than the previous estimate of -0.7%, according to the Office for National Statistics
- This data was supported by higher realised sales and an increase in net lending to individuals, which, together, underlined hopes that the UK should pull out of recession in the 3 rd quarter.
- The positive market reaction enabled the pound to distance itself from long-term lows hit recently against the aussie, though an increasing UK current account deficit may weigh on sterling’s recovery.
- In trading this morning, the Australian dollar has rebounded, already up 0.4% on the day, following better-than-expected month on month retail sales, which add to the case for a rise in interest rates as early as November.
