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Sterling hits seven month high against the US dollar

STERLING gained against a broadly falling US dollar yesterday, as share prices rose on expectations for the global economy to stabilise, prompting investors to cautiously shift towards riskier assets.<br /><br />The pound rose to a seven-month high against the dollar, while it also gained against the euro and the yen.<br /><br />The dollar fell broadly, hitting its lowest level since mid-December 2008 against a basket of currencies.<br /><br />By mid-afternoon, the pound was up 1.4 per cent at $1.6413 after rising to $1.6432, its highest since late October last year.<br /><br />&ldquo;The pound&rsquo;s strength has been concentrated largely against the weakening dollar,&rdquo; said Daragh Maher, deputy head of foreign exchange strategy at Calyon.<br /><br />The euro was down 0.9 per cent at 86.55p while the pound was up 1.7 per cent against the yen at 156.73 yen, highest since mid-November.<br /><br />&ldquo;We expect to see euro/sterling stabilise around these levels, although... sterling weakness could be seen on any further extensions to quantitative easing,&rdquo; UBS analysts said in a note.