Sterling up as risk appetite improves

Sterling recovered ground against the US dollar yesterday, rising by more than a cent to finish the day at $1.6422.

• The pound made sharp gains in the early morning yesterday, after a poll suggested China is on track to achieve its 8% growth target this year, while Asia's worst hit economies of Singapore and Taiwan will see a sharp turnaround next year as the entire Asian continent rebounds.
  
• The optimism this poll triggered led to decreased demand for the safe-haven of the dollar.
  
• Sterling did pare some of its gains against the dollar later yesterday morning, however, after British employment figures revealed a larger-than-expected rise in UK unemployment.
  
• British unemployment hit its highest rate since January 1997 in the three months to May, the figures showed.
  
• However, the pound recovered its losses in the afternoon after very strong corporate earnings figures from Intel and Goldman Sachs boosted investor confidence and triggered a sell-off in the greenback.
  
• The pound has begun losing some ground to the US dollar this morning, after news that CIT, a mid-sized US bank, may soon file for bankruptcy.