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Sterling lifted on recovery hopes

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Sterling bounced back against the US dollar on Tuesday, to reach a two week high of $1.6523.

The pound was supported by the rising equity and commodities market as well as better-than-forecast monthly manufacturing production figures, which climbed to 0.9 per cent in July by from 0.4 per cent in June.

Duncan Higgins, senior analyst at Caxton FX said: ”After heavy falls over the last two weeks today’s manufacturing data will come as welcome relief for the Bank of England’s Monetary Policy Committee, who are meeting on Thursday.

“If equity markets continue to rally, they may now be able to talk more positively about the UK’s recovery prospects. Caxton FX’s analysts are therefore predicting the pound will regain some value against the dollar in the lead up to Christmas.”

Sterling was not the strongest currency against the US dollar, however, with the euro hitting a one-month high against the greenback, whilst the Australian dollar which hit a one-year peak. The pound also rallied against the euro following the data, as the FTSE 100 climbed 0.7 per cent in early trading.

Published on the Financial Times

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Written by Magda M Ali

November 16, 2009 at 11:04 pm

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