Sterling snapped three days of declines versus the dollar and euro. Gross domestic product grew 0.5 percent after shrinking the same amount in the fourth quarter, the Office for National Statistics said today, matching the median estimate of 28 economists surveyed by Bloomberg News. Services, which make up 76 percent of the economy, grew by 0.9 percent, the most since 2006.
“The reaction that we’re seeing in the pound right now is some kind of relief, because some thought the number would be even weaker,” said John Hydeskov, chief analyst at Danske Bank A/S in London.
The pound advanced against all but two of its 16 most actively traded counterparts. Sterling rose 0.3 percent to $1.6523 as of 4:31 p.m., extending its monthly gain versus the greenback to 3.1 percent. It strengthened 0.2 percent to 88.67 pence per euro, after earlier depreciating to 89.23 pence, the weakest level since April 13.
U.K. government bonds fell, pushing the 10-year yield up nine basis points to 3.57 percent. That’s the biggest intraday move since March 22. The 3.75 percent security due September 2020 slipped 0.68, or 6.8 pounds per 1,000-pound ($1,656) face amount, to 101.42. The two-year note yield rose 10 basis points to 1.19 percent.
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