LONDON: Sterling traded near a one month high against the dollar on Wednesday, buoyed by expectations that UK growth numbers due this week will indicate a sustained recovery is taking hold.
Analysts, however, said market participants were still not betting on any drastic moves higher in the pound until the Bank of England clarified its policy stance next month.
Sterling was flat at $1.5365, but close to Tuesday's peak of $1.5393, which was the highest since June 26 and was acting as near-term resistance. Support was cited at the 50-day moving average of $1.5292.
"We are looking for a potentially decent UK GDP figure of 0.6 percent, compared to the relatively flat performance in preceding quarters and this is helping sterling," said Simon Smith, chief economist at FXPRO.
Data on Thursday is forecast to show the UK economy grew 0.6 percent in the second quarter from the previous quarter. This would be double the first quarter's 0.3 percent.
Traders said the pound was also tracking gains in the euro which rose broadly after euro zone Purchasing Managers Index (PMI) data showed a surprise growth in the private sector.
The euro was up 0.2 percent at 86.18 pence against sterling and up 0.2 percent at $1.3242 versus the dollar , having risen to a peak of $1.32555, its highest since June 20.
A narrowing of spreads between 10-year US Treasuries and UK gilt yields on scaled back expectations that the Federal Reserve will start withdrawing monetary stimulus in the short term, also supported sterling.
The pound has benefited from recent, positive UK economic data and after the BoE minutes unexpectedly showed all nine Monetary Policy Committee members were opposed to more stimulus.
But strategists said sterling's gains would be curbed ahead of the BoE inflation report and meeting in August as markets anticipate some form of forward guidance on future policy.
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