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.