As concerns over Dubai ease, the haven appeal of the USD is beginning to soften

The pound advanced against the dollar yesterday, up 1.0%, as UK house prices continued to rise and as concerns eased that a delay in Dubai's debt payments would hurt UK lenders.

• The pound snapped three days of losses against the US currency after Nationwide Building Society said the average cost of a home in the UK increased 0.5% in November. The data offset a larger than expected decline in the manufacturing sector.
  
• Meanwhile, Dubai World began negotiations to restructure about $26 billion in debt and said the remainder of its $59 billion of liabilities was on "a stable financial footing."
  
• Sterling managed to extend gains after US data showed the manufacturing sector grew in November, though at a slower pace, while pending home sales rose to a three and a half year high in October.
  
• US pending home sales rose 3.7% in October, against market expectations of a decline of about 0.6%, which shows that construction activity in the US might be about to come out of a long lasting slump. The greenback softened on the improved economic outlook.
  
• A strong showing in global equity prices also supported a move away from the US currency, with the FTSE up 2.3% and the Dow Jones also closing up well over one percent.