Sterling rises against dollar

Sterling has risen in value against the dollar this morning peaking close to $1.625.

The rise comes after the British manufacturing sector reported good business which, alongside improved mortgage approval rates, has increased faith in the UK economy.

Jeremy Stretch, strategist at Rabobank in London, told Reuters that the dollar's own poor performance has also had an influence.

Mr Stretch said: "The dollar has been suffering across the board ... and that has been beneficial to sterling. And certainly, the data has not done any harm."

Despite the pound's recent gains, many analysts have said that sentiment towards the pound remains negative amid worries of a "flagging" UK economy and continuing debt.

Trading with the euro has fallen today with sterling hitting a low of €1.112; however this is part of a general upward trend for sterling against the euro.

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Posted by Thomas Smith