Sterling hit its strongest in 12 weeks against the dollar on Friday, as investors sold the U.S. currency on expectations that the Federal Reserve will not hurry to raise interest rates in coming months.
The dollar extended losses after data showed U.S. inflation barely rose in March as consumer spending remained tepid, while another report showed labor costs increased at a moderate pace in the first quarter.
Sterling climbed to $1.4665, its strongest since early February. It was last trading at $1.4650, up 0.3% on the day and on track for a 1.7% weekly gain.
"The subdued inflation reading brought another round of dollar selling. But there is some resistance for sterling around its Feb 4 high of $1.4672," said a spot trader.
On the final trading day of the April, the pound was on track for a second straight month of gains - the first time that has happened since late 2013. On a weekly basis, it was heading for its best performance since early March.
That was despite persistent concerns that a June 23 referendum will lead to a vote for Britain to leave the European Union, which most economists reckon would deal a blow to the British economy and currency.
A YouGov poll for the Times on Thursday showed the "Out" camp edging into the lead.
Bookmakers' odds have consistently shown a vote for "Remain" the more likely outcome, with betting website Betfair putting the chances of a Brexit at around just 30%. Those odds, closely watched by investors, have lent support to the pound.
Against the euro, sterling was weaker at 78.15 pence. (Reuters)
Source: www.businessworld.ie
