Sterling hits six-month high against the dollar
The UK currency today hit a six-month high against the US dollar on a mixture of an improved outlook for the UK economy, profits from HSBC and an appetite for risk among some investors. Sterling also hit a one-month high against the euro amid signs that the UK economy appears to be faring better than the European economy at this moment in time.
The UK stock market has been very volatile over the last few months amid signs that hopes of a recovery in the UK economy may well be short-lived. However, last week we saw an improvement in the UK manufacturing sector, forecasts of a very strong banking sector reporting season and hopes that the UK property sector may not be as weak as initially thought in the latter part of 2010.
As we have mentioned on numerous occasions, it is very risky to take any one set of economic figures in isolation because the trend with regards to the UK economy has been almost impossible to predict for at least two years now. While some investors are relieved that the manufacturing industry is beginning to pick up again, many investors and analysts are happy to wait on the sidelines for clarification that the trend has turned and the UK is in fact moving away from a possible double dip recession.
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