Pound and FTSE hit 10-month highs
August 5, 2009
The pound and the FTSE 100 index of top UK-listed shares have hit their highest levels since October on growing hopes for an economic recovery. Markets took heart after brighter UK economic data and a rally in financial stocks following profits from banking giants HSBC and Barclays.
Sterling rose as high as $1.6879 against the dollar and also hit a one-month high against the euro. The FTSE 100 index rose as high as 4,693.06 points.
Shares in Barclays climbed 6.7% after reporting an 8% rise in half-year profits, while HSBC rose 5.1% after it made better-than-expected profits of $5bn.
In early afternoon trade, the FTSE 100 was up 1.55%, or 71.4 points, at 4,679.76 points. Oil prices also rose to a one-month high above $71 a barrel, as an economic recovery should lead to greater demand for crude.
The pound got a lift after data showed the UK manufacturing sector expanded for the first time in more than a year. Manufacturing activity rose last month for the first time since March 2008, as new orders came in, according to a survey by the Chartered Institute of Purchasing and Supply (CIPS) and Markit.
While still a long way below the $2 levels seen in July last year, the pound has rebounded 25% from the 23-year low of $1.35 it hit in January this year.
The pound has also benefited from recent weakness in the dollar. The US currency has suffered as signs of a global economic recovery have encouraged investors to move their money out of dollars and into riskier assets. The dollar is trading near its lowest levels this year when measured against a group of major currencies.
More details available at http://news.bbc.co.uk/
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