Pound continues to perform well against dollar

The pound continued to strengthen against the US dollar overnight, as riskier currencies benefited from stronger equity markets amid tentative optimism about the US government's plan to take stakes in struggling financial institutions.

However, the pound’s momentum has begun to peter out this morning, as investor optimism is starting to wane on renewed concern about the deteriorating economic climate in Europe and Japan.

The Confederation of British Industry's distributive trades survey is due at 11.00 GMT today, while the house price index and consumer confidence figures are released in the US this afternoon.

GBPUSD: 1 week chart. Please click on chart to enlarge.