Sterling recovers

Sterling rose on Monday, recovering from a four-month low against the euro as investors booked profits on the single currency's early gains, while an affirmation of the UK's sovereign rating supported the pound. The euro also faced key technical resistance around the 86.90 pence level, while analysts said the lingering possibility of a UK interest rate rise before mid-year would push the currency higher.
The euro was essentially flat at 86.60 pence in late London trade. It was unable to climb significantly beyond 86.90 pence, where the 61.8 percent Fibonacci retracement of the euro's October-January downmove lay. The pound traded at 132.02 yen, bouncing from a six-week low of 129.85 yen after the Bank of Japan announced liquidity measures to shore up confidence in an economy hit by the triple blow of a massive quake, a tsunami and a nuclear emergency.