The pound gained ground against its major peers on Friday (26 August), after data released by the Office for National Statistics (ONS) showed that the UK economy grew in line with expectations in the three months leading up to the European Union referendum. Sterling climbed above $1.32 for the second time this week, having not breached the threshold for two weeks previously, trading 0.24% higher against the dollar at $1.3220.

The pound was also on the front foot against the euro, rising 0.20% against the common currency to €1.1708.

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Earlier in the day, the ONS confirmed the preliminary data released on 27 July, which showed the UK economy grew 0.6% in the second quarter, up from 0.4% in the previous three months. On an annual basis, meanwhile, the economy expanded 2.2%, in line with the first estimate and with analysts' expectations.

"The UK entered the post-referendum period with good momentum," said Ian Stewart, chief economist at Deloitte. "Household spending accounts for roughly two-thirds of the economy and is growing at the fastest rate in eight years. We see few signs that Brexit has derailed the consumer recovery."

Elsewhere, the dollar slid against both the euro and the yen, as investors remained ahead of Federal Reserve chairwoman Janet Yellen's much-anticipated speech at the annual Jackson Hole Symposium. The greenback was 0.06% lower against the euro at 0.8854 euro cents and fell 0.07% against the yen to ¥100.46.

On Thursday San Francisco Fed president John Williams and Kansas City Fed president Esther George indicated the US central bank will need to raise rates, albeit gradually, to keep the economy ticking and analysts expect Yellen to adopt a similar approach.

"Yellen is highly likely to be hawkish today and may be speaking about normalising the monetary policy while emphasising that further growth can be achieved by fiscal reforms," said Naeem Aslam, chief market analyst at ThinkMarkets UK. "Most of the central banks around the globe have started to pay more attention to fiscal reforms now and we believe that she is in a much better position to achieve this."

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