2014.06.2405:55:57UTC+00Pound 0.3% from 5-year peak on bullish bets

The British pound was around 0.3% from the highest level in over five years versus the US dollar as data displayed speculators escalated their bets on its appreciation to the most since 2007.

Sterling reached the strongest level against the euro since October 2012 prior to a report this week that analysts said would validate the United Kingdom grew 0.8% in the 1st quarter. An improving economy pressed Bank of England Governor Mark Carney to say an interest rate hike might happen sooner than anticipated, which was reiterated in minutes of this month’s Monetary Policy Committee meeting released last week.

“The market could have taken sterling too far here. There could be a washout on long positions and rate spreads have done nothing since the Carney speech. I’m wondering if we go back higher on the dollar.” A long position is a bet an asset’s value will rise,” said John Hardy, Head of Foreign Exchange Strategy at Saxo Bank A/S.

Sterling was slightly changed at $1.7008 at 4:28 p.m. (London time) after it rose to $1.7063 last week, the most since October 2008. The currency was at 79.93 pence per euro after it appreciated as much as 0.2% to 79.77 pence. It hit 79.59 on June 16, the strongest level since Oct. 1, 2012.