Sterling recovered some poise today, soaring higher after inflation jumped to a two-year high.
The FTSE 100 also jumped back above 7,000 in early morning trading, fading only slightly to end the day up 0.7 per cent at 6,994 as traders and investors digested the news that prices rose by one per cent in the year to September.
The pound was up a bumper 1.2 per cent against the dollar at $1.2313, breaking through the $1.23 barrier for the first time in eight days. Sterling also managed a 1.2 per cent ascent against the single currency to hit €1.1210 as the London markets wound down for the day.
Despite the climb higher, sentiment was still mixed on the short-term outlook for sterling.
FXTM's Lukman Otunga said: "The technical bounce displayed should be of no surprise and may even offer an opportunity for bears to install another round of selling."
Goldman Sachs remained downbeat on the pound and others dismissed the idea that high inflation could prompt the Bank of England to delay an interest rate rise – which would normally be keen to prevent inflation overshooting its two per cent target.
On the stock market, EasyJet – which has suffered hard in the face of the sliding pound – was the top riser, followed by retailers Next and Marks & Spencer who both put on more than four per cent.