Pound fell lower against the dollar yesterday, but found some support to ease its rate of decline

Sterling fell as persistent bearish sentiment pushed it to an intra-day four-month low of $1.5796 against the dollar, before closing at $1.5882.

  • The pound managed to pull back slightly from early losses after Chancellor Alistair Darling made a speech in which he reiterated the need to curb “reckless” bonuses.
  • His comments suggested that the government would be taking forceful steps to firm up the fragile banking system which returned a certain amount of confidence to investors and prevented the pound from falling further.
  • The pound also benefited from slight profit taking and rising stocks, but analysts said that despite expectations for improving economic data, the sterling / dollar price looks vulnerable to a further downside push with strong resistance materialising around 1.5750.
  • This morning, sterling is trading marginally lower as investors await important economic data released in the UK and the US today.
  • CBI realized sales are out in Britain at 11:00BST, whilst in the US, data from a consumer confidence survey at 15:00BST is likely to reveal improved sentiment, which could stem demand for the haven currency.