Friday, 4 September 2009

Pound continues to advance against the greenback

Strong data emerging from the UK yesterday supported the pound as risk aversion eased, lifting sterling to a close $1.6316.
  • The pound advanced further against the dollar yesterday as economic data showed the UK services sector grew more rapidly last month than had been anticipated.
  • Waning risk aversion as British and European shares held their value in morning trading, also supported the pound.
  • In the afternoon however, stock indices descended into the red, causing the pound to par its gains, falling from a six-day high of 1.6412.
  • Questions remain about how far the pound can continue to appreciate with concerns that the UK will maintain an extremely accommodative monetary policy.
  • The pound has continued to post marginal gains against the greenback in early trading, as investors anticipate an improved monthly non-farm employment change, data about which is released at 13:30BST.

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