Sterling up after CBI survey

The pound strengthened by 0.44 cents (0.27%) against the US dollar yesterday, finishing the day at $1.6567.

• In early trading yesterday sterling rose against the dollar, after a report released by the property company Hometrack showed the annual pace at which house prices in England and Wales were falling slowed for the third successive month.
  
• Together with the news from the CBI that British financial service companies were more positive now than at any time in the last two years, this report stoked sentiment towards the UK’s chances of recovery, benefiting the pound as a result.
  
• However, the pound’s gains were capped by the news that Chinese officials were not looking to diversify their reserve currency holdings any time soon. This was positive news for the dollar, following months of debate about the use of an alternative global currency to the greenback.
  
• In trading so far today the pound has resumed its rise against the greenback as improved risk appetite continues to sweep the market.
  
• There are important announcements due on both sides of the Atlantic today. In the UK, revised first-quarter GDP and the latest current account figures are out at 09.30 BST, whilst in the US CB Consumer Confidence data is out at 15.00 BST.