Aussie advances against the pound as risk appetite in the market strenghtens

Sterling continued to slide against the aussie yesterday, as confidence in the strength of the UK economy was put under pressure.

• Early gains for the pound, following a rise in house prices, were dashed in an inflation report in which BoE governor Mervyn King stated the central bank was considering lowering interest rates.
  
• Demand for the pound immediately fell, with the price falling from an intra-day high of 1.9326, to a close of 1.9089, a drop of 1.2%
  
• Mr King added that the British economy had probably started growing again but recovery would be slow and risks to inflation were still to the downside, which put further selling pressure on the pound.
  
• Overnight the Australian dollar has advanced further, supported by strong Asian stocks and rising optimism over the global recovery, with the pound now breaking thirteen-year lows, falling another 0.6% so far today.