The waning of risk appetite and slight profit taking enabled the pound to climb against the aussie

The pound reversed a run of losses yesterday, advancing 0.7% on the aussie, as demand for the riskier currency was dulled as risk appetite waned.

• The aussie retreated from two-week highs as the rally in global stocks markets stumbled slightly, reducing investors' willingness to take on risky trades.
  
• The loss of risk gave traders an opportunity to cash in on aussie strength and take profits ahead of the week, which enabled the pound to close the day up at 1.7944.
  
• Analysts noted that market participants were unwilling to take up positions in risky assets ahead of statements from policymakers in the build up to this weekend's APEC Summit and next week's US-China Summit.
  
• In trading this morning the pair are trading sideways, holding around the overnight closing price. However, analysts are expecting the aussie to remain strong over the longer term with high gold prices and a weak US dollar supporting demand for the Australian currency.