Sterling soars on strong growth data, ratings outlook rise
Wednesday, 27 October 2010
LONDON, Oct 26 (AFP): Sterling rallied sharply Tuesday in reaction to strong British economic growth data and after Standard & Poor's upgraded its outlook after last week's radical spending cuts.
In late morning trading here, sterling jumped as high as 1.5897 dollars, hitting the highest level since October 19. And it also hit a similar peak at 87.76 pence against the euro.
"There is no stopping sterling today," said research director Kathleen Brooks at online trading site Forex.com.
She added: "After three months of selling, there has been a massive reversal.
"This has been combined with a strong fundamental boost after rating agency S&P revised its outlook for the UK's AAA status from negative to stable."
Official data showed that Britain's economy expanded by a solid 0.8 per cent in the third quarter of the year. That was double market expectations and marked the fourth quarter running of growth since the recession.
The news eased market concerns that the Bank of England could launch more stimulus measures to strengthen the recovery, according to analysts.
In recent weeks and months, sterling was hammered by expectations that the BoE could launch more quantitative easing (QE) -- effectively printing more money -- to secure economic recovery.
In late morning trading here, sterling jumped as high as 1.5897 dollars, hitting the highest level since October 19. And it also hit a similar peak at 87.76 pence against the euro.
"There is no stopping sterling today," said research director Kathleen Brooks at online trading site Forex.com.
She added: "After three months of selling, there has been a massive reversal.
"This has been combined with a strong fundamental boost after rating agency S&P revised its outlook for the UK's AAA status from negative to stable."
Official data showed that Britain's economy expanded by a solid 0.8 per cent in the third quarter of the year. That was double market expectations and marked the fourth quarter running of growth since the recession.
The news eased market concerns that the Bank of England could launch more stimulus measures to strengthen the recovery, according to analysts.
In recent weeks and months, sterling was hammered by expectations that the BoE could launch more quantitative easing (QE) -- effectively printing more money -- to secure economic recovery.