The Pound rallied above 1.56 against the U.S Dollar yesterday, after a report from the Bank of England showed that UK mortgage approvals unexpectedly increased in November. Sterling was up 0.7% from the low of the day and strengthened 0.6% versus the Euro, as lenders granted 48,019 loans to buy property in November.
Elsewhere, the Pound also received a much-needed boost, as a report from the Chartered Institute of Purchasing and Supply said that a gauge of UK manufacturing expanded at the fastest pace in 16-years in December. A weak Pound has increased demand for UK exports, suggesting that the economic recovery remained on track as 2010 drew to a close.
Hetal Mehta, an economist at Daiwa Capital Markets Europe, said that "the manufacturing sector has long been expected to lead the recovery on the back of a weaker exchange rate. 2011 could well be the year that this expectation becomes a reality." New orders also rose at the fastest pace since May, led by the increased demand in UK exports....read more
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