The pound headed for a weekly advance after a series of reports showed the U.K. economy is remaining resilient in the wake of the vote to quit the European Union.
Sterling climbed against all but one of its 16 major peers after July inflation, import prices and jobless claims beat forecasts, suggesting that — at least for now — the U.K. is shrugging off economists’ warnings of a post-Brexit slowdown. While surveys after the June 23 vote had already signaled contractions in various sectors, this week’s figures were the first concrete evidence of the referendum’s economic impact.
“The market is short” the pound, “so we did get a little bit squeezed,” said Gavin Friend, a strategist at National Australia Bank Ltd. in London, referring to bets the currency would weaken. “We do have lower views for sterling going further out.”
The pound fell 0.4 percent to $1.3118 as of 10:16 a.m. in London, poised for a 1.5 percent weekly gain — only its third since the referendum.
Sterling was little changed at 86.26 pence per euro, set for a 0.2 percent weekly advance, following four weeks of declines. The U.K. currency weakened to a three-year low of 87.25 pence versus its European counterpart on Aug. 16.