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Tuesday 23rd of February 2010
April 20, 2009    

CaxtonFX expects sterling’s rise to continue

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by David Masters
CaxtonFX expects sterling's rise to continue

Sterling started its fight back against the euro and the dollar in recent weeks, and analysts at CaxtonFX expect this trend to continue.

Currency exchange provider CaxtonFX pointed out that last week’s stock market rallies and a 5% rise in the FTSE 100 banking index caused sterling to rise to €1.13 and above $1.50.

By comparison, the group expects the euro and the dollar to fall in value as investors become increasingly willing to take risks.

Alex Dunn, senior analyst at CaxtonFX, explained: “The euro economy is weak and the European Central Bank is likely to cut rates further and move towards quantitative easing.

“The dollar is likely to weaken as risk appetite returns to the markets.

“As a result we are now looking for sterling to rise in the medium term.”

He added that in CaxtonFX’s view, the UK economy has ‘bottomed out’ and is set to begin its recovery.

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