(Bloomberg) -- The pound shrugged off slower-than-forecast economic growth in the U.K. to head for its biggest monthly advance in a year.
Gross domestic product rose 0.3 percent in the first quarter from the prior three months, less than the 0.4 percent median estimate of economists surveyed by Bloomberg and the slowest growth in a year. Still, the currency held above $1.2900 and was set for its second monthly advance against the dollar after Prime Minister Theresa May announced a snap election for June on April 18.
“The slowdown was mostly priced in,” said Ipek Ozkardeskaya, a senior market analyst at London Capital Group. “As a result, the $1.30 level stands as an appetizing target for GBP bulls, especially on the back of an almost-sure majority for Tories at the upcoming snap election.”
The pound traded 0.3 percent higher at $1.2937 as of 9:52 a.m. in London, taking its monthly gain to 3.1 percent.
- Sterling’s gains before the data was released were partially due to month-end flows, traders familiar with the matter said
- Resistance at 1.2992, 55-week MA, and support at 1.2839, April 27 low
- Option expiries at 1.2800 (GBP613m), 1.2900 (GBP787m), 1.3000 (GBP971m)
- EUR/GBP little changed at 0.8430 and on course for 0.7% monthly drop
- Pair fills Monday’s gap as rebound lost traction at 0.8531 double-top
- Option expiries at 0.8350 (EU1.05b), 0.8400 (EU325m)
- U.K. house prices fell for a second month in April, according to Nationwide Building Society, which said the drop may be part of a wider trend showing weakness in consumer demand
- May’s call for a snap election has done little to inspire confidence among portfolio managers on the pound’s prospects, who are still looking for downside in the currency