Sterling rises 1% vs dollar at start of data-heavy week

Joice Alves
·2-min read
FILE PHOTO: Wads of British Pound Sterling banknotes are stacked in piles at the Money Service Austria company's headquarters in Vienna

By Joice Alves

LONDON (Reuters) -The pound rose 1% to hit a one-month high against the dollar on Monday at the start of a data-heavy week that is expected to provide more evidence that Britain's economy is rebounding from its deepest recession in 300 years.

Sterling was $1.3993 against a weakening dollar at 1458 GMT, its highest level since March 18.

It was 0.7% higher versus the euro at 85.89 pence, its highest in almost two weeks.

Traders will be watching PMI surveys for the United Kingdom, together with data on the labour market, inflation and retail sales this week.

"GBP continues to find support on dips and it seems like investors are happy enough staying positioned for the 2Q UK re-opening story," said Chris Turner, Global Head of Markets at ING. "Today we have already seen some encouraging April Rightmove house price data."

Advertised prices for homes in Britain hit a record high after finance minister Rishi Sunak stoked the market again by extending a tax cut for home-buyers last month, property website Rightmove said on Monday.

As non-essential stores re-opened in England, the number of people heading to shops across Britain jumped 87.8% last week, researcher Springboard said on Monday.

Data over the weekend also showed Britain had recorded 10 COVID-19 deaths in a day, its lowest since September.

"Current domestic COVID data is encouraging and a further easing of lockdowns will all point in the direction of the UK economy early out of the block on economic recovery expectations," said Neil Jones, Head of FX Sales at Mizuho Bank.

A fast roll-out of vaccinations against COVID-19 across Britain, dwindling expectations of negative interest rates, and a Brexit trade deal with the European Union have supported the pound this year.

Speculators' net long position on the pound versus the dollar rebounded in the week to April 13 after slipping to its lowest since February in the previous week, futures data from CFTC showed.

Sunak told the Bank of England on Monday to look at the case for a new "Britcoin", or central bank-backed digital currency.

(Reporting by Joice Alves, Editing by Raissa Kasolowsky, Andrew Heavens and Timothy Heritage)