Sterling hits 10-month high
Optimism surrounding the UK economy continued today after the pound continued its gain against the US dollar.
Sterling briefly reached as high as $1.7005 today – the highest level since October – before falling back to $1.6930.
While the pound still has a long way to go to reach the $2 mark seen a year ago, it has recovered 25% from the 23-year low of $1.35 earlier this year.
Yesterday, the FTSE 100 and the pound both gained on the back of growing hopes for an economic recovery after a rise was reported in manufacturing activity and HSBC and Barclays boosted investors after announcing strong results.
For the first time in almost 18 months, there was a growth in manufacturing activity, benefiting unexpectedly from an influx of new orders – the fastest since November 2007.
Analysts at Calyon, the French investment firm, said there was “growing optimism that the UK economy will be able to shake off the shackles of recession faster than many had thought”.
In other news today, there are tentative signs that construction sector is recovering after figures revealed that the slowdown in activity eased in July to the slowest pace for sixteen months.
The CIPS/Markit Construction Purchasing Managers’ Index posted a reading of 47 in July – soaring from the record low of 27.8 earlier this year.