The pound made further ground against the US dollar on Friday, buoyed by positive market sentiment

Sterling extended sharp gains against the dollar, as traders cut short pound positions after many reckoned earlier bets against the currency were overdone.

• Sterling found support following further upbeat comments from a BoE member concerning the quantitative easing programme.
  
• Sterling reached up to a three-week high against the dollar, peaking just below 1.64 before closing the week at $1.6353.
  
• Initially sterling trimmed its position after sterling/dollar stop-loss orders were triggered at $1.6300, but some analysts noted that the pound would continue to be supported as investors had taken up fresh long positions in sterling and were willing to hold onto them.
  
• Sterling also found support from recent M&A talk, with Qatar’s sovereign wealth fund planning a renewed offer for the supermarket chain J Sainsbury.
  
• Sentiment towards the US currency remained weak as optimism about the global economic outlook, buoyed by a string of strong US corporate results, turned people away from the greenback in favour of perceived riskier currencies.