Home > Investments > Alternative Investments
Sterling hits year-high as positive economic data prompts rally
Sterling hit a year-high against the euro this morning (11 June), following positive economic data that the UK economy may already be on its way out of the recession.
By just after 11.30am this morning, sterling was trading at €1.1757 - its highest level this year - and was still rising.
Meanwhile, against the US dollar the sterling was trading at $1.6446 by 11.30am.
The increase followed monthly data published by the the National Institute of Economic and Social Research (NIESR) which claimed that the UK recorded positive growth in GDP in two consecutive months, in April and May. (See article.)
Mark O'Sullivan, director of dealing at foreign exchange provider Currencies Direct, said: "The increased support for sterling in the money markets has been fuelled by a growing belief that the worst of the recession in the UK may be over.
"Backing sterling has not been for the faint-hearted in recent times but now the political debate has died down and with more positive economic data coming out of the UK, the market is being viewed as glass half full."
O’Sullivan added: "And looking at the economic data coming out of the euro zone, and it's clear that the situation over there is still getting worse, not better. The growing move away from holding the dollar as a reserve currency is also helping sterling.
"The currency markets have also seen the pound strengthen against the Japanese yen, another clear indication of the appetite to take a long-term position on sterling on a global economic recovery play."
