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Positive sterling on growth prospects
Economists expect the UK to have grown at its fastest rate since 2010. GDP out on Friday is forecast to show 0.8 percent growth in the three months to September. This builds on the growth of 0.3 percent and 0.7 percent seen in the first two quarters of 2013.
Neil Staines from ECU Group says this is just one of the reasons he is positive on the UK and on sterling.
He says funding for lending, the shrinking deficit and fact that number of Bank of England members are confident of a robust UK recovery and are comfortable with a firmer exchange rate point to a strong currency.
If we can get beyond the October 1 high of USD1.6260 and then USD1.6325 and if the dollar stays under pressure Neil says we could look toward USD1.70. “it may seem extreme but under the right circumstances it’s not off the cards”
But although he sees opportunities in cable to the top side, he says there may be certain periods where you may wish to take the dollar out of the scenario. Citing a widening growth differential between the eurozone and the UK he sees good risk reward selling euros and buying sterling.
01:37 minutes
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