Sterling Peaks on BoE Comments and Strong GDP Data

Sterling reached a four-month high as Bank of England remarks and robust GDP data led traders to bet against an August rate cut. The pound rose to $1.2864 after BoE's Huw Pill indicated persistent price pressure. Futures markets reflected a 50/50 chance of a rate cut in August.

Sterling surged to a four-month high on Thursday, buoyed by optimistic remarks from Bank of England policymakers and better-than-expected GDP data. Traders scaled back their bets on an August rate cut, pushing the pound up by 0.16% to $1.2864, its highest level since early March.

Bank of England Chief Economist Huw Pill's comments on Wednesday about persistent price pressures and Thursday's data showing a 0.4% increase in economic output for May contributed to the stellar performance of the pound.

Lee Hardman, senior FX analyst at MUFG, noted that futures markets now attach a roughly 50/50 likelihood of a rate cut at the Bank's August 1 meeting. However, Pill's comments suggested he's not ready yet to vote for a rate cut.