Pound starting to recover losses vs dollar

Following late selling yesterday evening, the pound was able to edge back up against the greenback to close the day nearly a half cent up at 1.6281.

• Sterling seemed to be firmly on track for its steepest monthly decline this year with it briefly dropping below the 1.62 mark yesterday.
  
• In the UK, both business investment and realised sales figures emerged well below their forecasts supporting the notion of a weak recovery and discouraging sterling investment.
  
• However, in the US, government data showed that the economy fell by less-than-expected in the second quarter, easing the market’s risk aversion, and enabling the pound to claw back some of the week’s substantial losses.
  
• Additionally, a poor day for the European equity markets was not mirrored on either the Dow or Nasdaq, which both achieved minor gains and supported riskier investment.
  
• Inflation figures are released in the US today at 13:30BST and are forecast to remain relatively unchanged from last month as forecasters remain wary of over-estimating the pace of recovery.