Sterling posted gains aginst a broadly weaker dollar yesterday

Sterling reversed its slide yesterday, climbing 0.9%, taking advantage of dollar weakness and pushing on to a close of $1.6358.

• Rallying equities first in Europe and then followed on US indices, returned risk appetite to the market, putting pressure on the haven currency.
  
• Indeed the dollar suffered selling across the board yesterday ahead of the Federal Open Market Committee statement released this evening at 19:15BST, and the G20 summit later this week.
  
• Analysts expect the Fed to signal its ultra loose monetary policy will remain in place well into next year and the G20 to discuss rebalancing the global economy, a process that will almost certainly require a weaker dollar.
  
• The persistence of downward pressure on the greenback is likely to continue according to analysts, with investors increasingly favouring higher-yielding assets, which should keep the price high.
  
• Trading has been tightly range bound this morning, with the pound failing to hold its position above 1.6400 ahead of important economic information, and currently trading around 1.6360.