Sterling jumps versus dollar

Sterling hit a seven-week high against the dollar but fell sharply versus the euro on Thursday after European leaders struck a deal on tackling the eurozone debt crisis. The EU agreement bolstered market sentiment, helping the euro to a seven-week high against sterling but also buoying equities and perceived riskier currencies - including the pound.
Sterling reached $1.6085 against the dollar, its strongest since early September. It extended gains after data showed solid US third quarter growth, which raised optimism about the outlook for the global economy. Analysts said the pound was vulnerable to any pull-back in risk sentiment, but looked likely to remain supported around $1.60 versus the dollar as long as euro/dollar held near $1.40. It was last up 0.5 percent at $1.6046.
The pound underperformed a buoyant euro, however, with the single currency jumping more than one percent to 88.11 pence, vaulting the 88.00 pence mark, a level that has proved strong resistance since early September. This left it poised to break the September 8 high of 88.42 pence and the August high of 88.86 pence, though analysts said it was likely to struggle as it neared the 90 pence mark.
In late-night negotiations in Brussels, eurozone leaders struck a deal for private banks and insurers to accept a 50 percent loss on their Greek government bonds, and agreed to beef up the region's rescue fund. "The fact that EU leaders, who have disappointed on so many occasions before, have agreed a framework and avoided a disorderly, involuntary Greek default has been taken by the market as a positive," said Gavin Friend, currency strategist at nabCapital. "Sterling is gaining against the dollar but lagging other currencies. It could get to $1.62/$1.63, but I'd be looking to fade it there, while euro/sterling could get to 89.00 pence over the next couple of weeks".