The pound edged lower on Friday but remained firmly on track to put in its strongest weekly performance since mid-November, thanks to some robust economic data and hopes of an imminent trade agreement between the UK and the US.

In afternoon trading in London the pound was down 0.34 per cent against the US dollar, but up close to 1.5 per cent for the week, at $1.254.

Earlier this week, data from the Office for National Statistics showed that the UK economy grew by 0.6 per cent between October and December, ahead of analyst forecasts for a 0.5 per cent expansion.

Positive sentiment was underscored on Friday, when data showed that British consumer confidence had enjoyed its biggest increase since the summer in January.

Some traders on Friday also said that sterling’s strength was stemming from hopes of Theresa May and Donald Trump paving the way for a trade agreement between the UK and the US when the Prime Minister and the President meet later Friday.

“Mrs May wants to try to pave the way for a free trade deal with the US post-Brexit and Mr Trump, in spite of his protectionist biases, would probably like to help the UK prosper if for no other reason than to help prove his point that the EU is flawed and the UK is better off outside of it,” said Jim Reid, the head of global fundamental credit strategy at Deutsche Bank.

“So although it's a very early meeting where nothing will be decided it'll be interesting to hear from the leaders afterwards.”

Joshua Mahony, a market analyst at IG, said that the past two weeks the pound has experienced somewhat of a "renaissance".

"With the Pound so cheap, and the prospect of a newly rejuvenated UK to come, there is arguably as much reason for foreign investment to rise as there is for it to fall," he said.

But many still warn against becoming too bullish on the pound just yet.

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The currency has fallen around 16 per cent since June’s EU referendum and remains incredibly volatile.