Pound Higher Against Dollar, Down Against Euro

UK pound hit a one-month high against the US dollar earlier today, thanks to renewed optimism. Sterling followed the euro higher in Forex trading, gaining against the US dollar as investors look for high yields as risk appetite makes an appearance.

The UK pound is benefiting from a positive end to the week for stocks in Europe and in the US. Indeed, in the US, this week marks a positive 2011 overall for stocks. Pound is also benefiting from expectations that the sovereign debt crisis in Europe will be contained.

Pound is lower against the euro, though. With the good news in Europe, and continued concerns about the British economy, it is now surprise that EUR/GBP is higher. Indeed, with the Bank of England instituting another round of quantitative easing, pound is expected to have some downside against the euro.

Concerns about the British economy could also send the pound down against the US dollar. For now, though, it looks as though sterling is in a good position to head higher. Stocks are supporting high beta currencies in general, and there is hope for the global economy.

At 20:58 GMT, GBP/USD is higher at 1.5834, up from the open at 1.5820. EUR/GBP is slightly higher at 0.8778 verses the 0.8773 at open. GBP/CAD is a little higher at 1.5996, up from 1.5975.

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