The dynamics of the pound is still predetermined by the movements of the dollar, the vector of which will be set by US inflation data today. Their publication is expected at 15:30 Moscow time.
Pound/dollar chart in 5 minute intervals
The British pound edged up slightly on Wednesday, supported by a general weakness in the dollar. The rise also came after data showed that the UK economy unexpectedly expanded in May.
Economic output increased 0.5% in May, although consumer services fell as a surge in inflation hit shoppers. A Reuters poll of economists showed zero growth in May compared to April.
The pound rose 0.3% to $1.1937 by 0600 GMT and last rose 0.1% to $1.1894. Against the euro, it remained unchanged at 84.35 pence.
The pound has fallen sharply in recent weeks to new two-year lows, mainly due to the dollar’s soaring, but also due to investor worries about political uncertainty following the resignation of British Prime Minister Boris Johnson.
The ruling Conservative Party is in the process of choosing a new leader to replace Johnson.
Although growth in May was better than expected, other indicators point to a weakening economic momentum in the UK, which makes it even more difficult for the Bank of England as it tries to fight inflation by raising interest rates, while at the same time not slowing down excessive economic growth.