Pound Consolidates Near Year-to-Date Lows Amid UK Growth and Reverse-Brexit Risk

The Pound has been consolidating near its year-to-date lows against the Dollar, hovering around the 1.3200-level.

Lee Hardman at MUFG notes that despite resilient UK growth, with both Q1 and Q2 GDP revised higher and BoE staff upgrading Q3 forecasts to 0.4% from 0.1%, the Pound remains under pressure.

The Bank of England's hawkish comments support expectations for rate hikes, while Prime Minister Andy Burnham's openness to closer EU ties raises the prospect of a future reverse-Brexit trade for the Pound.