Sterling was steady against the dollar on Friday, sticking close to a seven-week high, while it recovered against the euro after suffering steep losses the previous day in the wake of an agreement by European leaders on the eurozone debt crisis. Sterling was flat on the day at $1.6108 versus the dollar. It was below a peak of $1.6140 hit on Thursday when equities and riskier currencies rallied after the eurozone deal and as solid US growth data eased concerns about a slowdown in the global economy.
The pound was on track for its best monthly performance against the dollar since April. Some analysts said the key for sterling's outlook will be whether it manages to close the week above its 200-day moving average, currently at $1.6139. Valentin Marinov, currency strategist at Citi, said while resilient investor risk appetite ahead of the G20 summit on November 3-4 could lend support to sterling in the near term, he was sceptical the rally could be sustained into the year end.
A survey by GfK NOP on Friday showed British consumer confidence has fallen to its lowest level since February 2009, adding to evidence the economy risks returning to recession. The euro traded down 0.2 percent at 87.90 pence. The single currency came under pressure as Italy had to pay dearly to issue 10-year debt, dampening some of the optimism after the European summit earlier this week.
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