British pound has best week since 2009

The pound posted its best week since 2009 as a flurry of news offered relief for the currency.

Sterling climbed this week on speculation a High Court ruling will delay or soften the terms of the nation's exit from the European Union and it received a further boost when the Bank of England said it's no longer expecting to cut interest rates again this year. The BOE also raised its forecasts for both consumer-price increases and growth. Options pricing indicates that traders have become less bearish on the pound in the short term.

Data that beat analyst forecasts helped lend support to the pound. A report on Thursday showed the UK services industry expanded for a third month in October, emphasising the economy's resilience since the June 23 Brexit vote. Still, sterling's rally this week barely dented its 16 per cent slide since the referendum.

Based on economic data, "sterling is more likely to rise than fall," Constantin Bolz, a Zurich-based foreign-exchange strategist at UBS Group's wealth-management unit, wrote in a note to clients dated November 3. "Given stronger growth and higher inflation, the case for further easing would be difficult to justify."

The pound rose 0.7 per cent to $US1.2545 as of 3.50pm on Friday in London, and earlier reached $US1.2548, the highest since October 7. The UK currency's six-day winning streak, its longest since March, pushed its weekly gain to 3 per cent, the biggest since October 2009. Sterling strengthened for a third day versus the euro, gaining 0.6 per cent to 88.60 pence.