The pound began last week on a positive note, rising against the dollar on Monday after the European Union’s top negotiator Michel Barnier said an agreement for Britain to leave the economic bloc might be reached in the coming weeks. Following the news the GBP/USD pair jumped above the 1.3000 level mid-European, reaching a 5-week high of 1.3051.
On the local data front, Gross Domestic Product (GDP) accelerated in the month of July, courtesy of a sharp rise in motor trading, lifting output to its quickest pace in nearly a year. GDP expanded by 0.3% in the month, above the MNI median forecast of a 0.2% rise, this following a 0.1% rise in June. That took growth in the three months to July to 0.6%. Industrial Production also rose by less-than-expected in July, up by just 0.1% mom, while manufacturing output contracted 0.2%.
Closing out the week, the pound peaked to its highest level in six weeks against the greenback. The GBP/USD pair reached a high of 1.3121 on the back of U.S. dollar weakness and the Bank of England keeping interest rates on hold at 0.75%, highlighted greater financial market concerns about Brexit, a month after raising borrowing costs for only the second time in more than a decade.