29, April 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

The British pound jumped to its highest level in two months against the U.S. dollar after the release of the data showing that the UK economy managed in the 1st quarter to avoid slipping into a recession. Thus, the possibility that the Bank of England will need to continue easing its monetary policy is reduced.

On Thursday, it became known that the UK's GDP increased by 0.3% in the 1st quarter compared to the 4th quarter. This news threw the pair more than 1% to a session high to 1.5479 which is the highest level since Feb. 13.

Apparently, the pound is going to return the losses incurred against the euro and the U.S. dollar, as the likelihood of further quantitative easing by the Bank of England has decreased.

Euro, meanwhile, lost its previously won positions after Goldman Sachs presented the forecast that the European Central Bank would cut its key interest rate by 25 basis points at a meeting on May 2.