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LONDON, Aug 26 (Reuters) - Sterling hovered near a three-week high against the dollar on Friday, with traders awaiting the second reading of UK growth figures amid receding worries over the impact of Britain's shock vote to leave the European Union.
The pound was on track for its best weekly performance in six weeks against the single currency
Short bets against sterling hit a record high in the week to Aug. 16, and traders said many speculators had been unwinding those positions and booking profits, which helped lift the currency.
Second-quarter gross domestic product data was being eyed for direction -- though it only covers a week of the post-EU-referendum period -- and should show how the UK economy held up during a time of heightened uncertainty.
"Growth accelerated unexpectedly in the second quarter according to the initial estimate despite any referendum-related uncertainties that may have weighed on economic activity," Charalambos Pissouros, senior analyst at IronFX Global.
Pissouros expects little reaction in sterling if growth comes broadly in line with expectations. Some traders said sterling may come under pressure if business investments data, which will also be released at the same time at 0830 GMT, falls short of expectations.
The pound gained 0.3 percent to $1.3230
Sterling rose 1.2 percent against the dollar last week after July inflation and retail sales numbers beat forecasts, adding to signs that consumers have yet to rein in spending after the Brexit vote.
The recent slew of upbeat data helped sterling stay clear of a three-decade low of $1.2798 struck on July 8. The pound had been under pressure earlier this month on expectations that the Bank of England might have to ease monetary policy further in coming months.
The central bank cut rates to a record low on Aug. 4 and restarted an asset-buying programme to cushion the economy from an expected post-Brexit slowdown. But after the recent data, some investors are reassessing the chances of further easing.
(Reporting by Anirban Nag; Editing by) ((anirban.nag@thomsonreuters.com)(+44)(0)(20 7542 8399)(Reuters Messaging: anirban.nag.thomsonreuters@reuters.net))
The pound was on track for its best weekly performance in six weeks against the single currency
Short bets against sterling hit a record high in the week to Aug. 16, and traders said many speculators had been unwinding those positions and booking profits, which helped lift the currency.
Second-quarter gross domestic product data was being eyed for direction -- though it only covers a week of the post-EU-referendum period -- and should show how the UK economy held up during a time of heightened uncertainty.
"Growth accelerated unexpectedly in the second quarter according to the initial estimate despite any referendum-related uncertainties that may have weighed on economic activity," Charalambos Pissouros, senior analyst at IronFX Global.
Pissouros expects little reaction in sterling if growth comes broadly in line with expectations. Some traders said sterling may come under pressure if business investments data, which will also be released at the same time at 0830 GMT, falls short of expectations.
The pound gained 0.3 percent to $1.3230
Sterling rose 1.2 percent against the dollar last week after July inflation and retail sales numbers beat forecasts, adding to signs that consumers have yet to rein in spending after the Brexit vote.
The recent slew of upbeat data helped sterling stay clear of a three-decade low of $1.2798 struck on July 8. The pound had been under pressure earlier this month on expectations that the Bank of England might have to ease monetary policy further in coming months.
The central bank cut rates to a record low on Aug. 4 and restarted an asset-buying programme to cushion the economy from an expected post-Brexit slowdown. But after the recent data, some investors are reassessing the chances of further easing.
(Reporting by Anirban Nag; Editing by) ((anirban.nag@thomsonreuters.com)(+44)(0)(20 7542 8399)(Reuters Messaging: anirban.nag.thomsonreuters@reuters.net))
