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Pound hits three-month high

Currencies Direct April 16th 2009 - < 1 minute read

The pound has hit a three-month high against the dollar amid gloomy US data and signs of strengthening confidence in the UK currency. Sterling broke through the 1.50 dollar mark several times – its highest level since January. It also rose to 1.137 against the euro at one point, its best performance in more than a month. Analysts said the pound was helped by a fall in the dollar in the wake of news that US consumer inflation had fallen into negative territory for the first time in more than half a century.

But they said investors have warmed to the currency since it hit record lows at the beginning of the year. Mark O’Sullivan, of Currencies Direct, said sterling has been steadily building for some time against both the euro and dollar, as investors gauge signs of recovery from the global recession. “There’s a little bit of belief then potentially that we can get ourselves out of this a bit quicker than the eurozone and the US,” he said. He said sterling could rise by as much as 10% against both the dollar and the euro in the absence of further negative economic news.

“Holidaymakers may get a few more euros for (their) pound,” he said. “Sentiment is certainly starting to turn against the euro, which means it is positive for sterling.”

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Written by
Currencies Direct

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