Currency exchange rate still strong for sterling

Sterling's currency exchange rate against the US dollar has reached a five-and-a-half month high this morning (August 2nd).

The pound bought $1.47 at 09:30 BST. Sterling also held up well against the euro, buying �1.20.

Analysts have suggested that positive economic data for the UK is behind the high currency exchange rate.

On July 23rd, the Office for National Statistics revealed stronger-than-expected economic growth for the second quarter of the year.

Adam Cole, currency strategist at RBC, told Reuters that the pound is likely to continue to perform well for now. "Sterling does seem to have got a lift from the general improvement in risk appetite, with the focus on banks reporting earnings," he said.

"If UK banks' earnings are strong that could be sterling-positive."

However, there is some concern over the extent of the impact of chancellor George Osborne's emergency Budget.

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Posted by Eleanor Ward