The U.S. dollar rose to five-month highs versus the weaker pound on Thursday, amid uncertainty over Britain exit from European Union and concerns regarding the U.K. economic predictions. The GBP/USD pair traded at 1.5784 before subsequently consolidated at 1.5786, losing 0.37%.
Excon Fuji Securities scaled back Britain's growth expectations, boosting concerns over the U.K. economic rebound. Previously, the IMF forecast that Britain’s economy would grow by 1% this year, which is 0.1% lower than October prediction. The fund also lowered its forecast for global growth from 3.6% to 3.5%, but stated that the global economy would grow by 4.1% in 2014 if the Eurozone pursued recovering.
Meanwhile, uncertainty clouded Britain’s future after David Cameron, the Prime Minister, stated that a referendum on the issue would be held before the end of 2017, due to growing political pressures on Britain to re-negotiate its relationship with European Union.
Earlier, Eurozone data showed that manufacturing activity in Germany, among other EU countries, improved in January, but France, the second largest economy in the Eurozone, remained in a recession state. The Eurozone manufacturing index (PMI) climbed to 47.5 in January, a 10-month high, from 46.1 in December. In the meantime, this month the French manufacturing index, PMI, dropped to a four-month low of 42.9.
