Sterling edged higher on Friday, helped by a better tone in equity markets, but gains were being hampered by broader concerns about the fragility of the UK economy and the possibility of more monetary easing. European banking stocks were higher following a short-selling ban on financial shares by France, Italy, Spain and Belgium. The UK's FTSE 100 index was last up 2.5 percent on the day.
This helped the pound to rise to the day's high against the dollar, but it was well within this week's range - above Thursday's low of $1.6111 and below Monday's high of $1.6478. "GBP/USD remains largely a story of global risk appetite and driven more by dollar direction than sterling," said Adam Cole, global head of fx strategy at RBC Captial Markets.
Sterling hit session highs in afternoon trade, up 0.4 percent on the day at $1.6313, above its 55-day average at $1.6217 its 100-day average of $1.6266. "Sterling above $1.6250/60 retargets the $1.6380 area," said Michael Hewson, analyst at CMC Markets. The euro was down 0.1 percent at 87.54 pence, though it was also expected to be capped in a tight range below its 100-day moving average at 88.21 pence and above the last week's low of 86.44 pence. Analysts expected the weak UK economic outlook to limit sterling's ability to capitalise on sentiment towards the euro that has weakened as the eurozone debt crisis has worsened.
Comments
Comments are closed for this article.