Pound up over 1.5 cents vs. US dollar

The pound rose sharply against the US dollar on Friday, finishing the day up 1.54 cents (0.94%) at $1.6523.

• In early trading on Friday the dollar weakened against sterling, during a day light on data. Strong London equities helped the pound’s cause early on, as did investor reaction to the US Fed’s monetary policy announcement late on Wednesday.
  
• The Fed’s clear hint that there would be no interest rate rises for the rest of this year spurred demand for higher-risk currencies like the pound on Friday, as investors looked beyond the US for assets which could offer better returns.
  
• However, gloomy growth forecasts released by the OECD earlier in the week, as well as Mervyn King’s downbeat testimony last Wednesday, capped sterling’s gains.
  
• In trading so far today the pound has fallen against the greenback, despite a CBI survey released this morning suggesting the UK financial sector is more upbeat now than at any time in the last two years.
  
• There are no major announcements due in the UK or US today.