Sterling 'vulnerable on UK economic worries'

Sterling was last trading almost flat at $1.5687, although it was not far off the high of $1.5780 seen on Wednesday, Reuters reports.

Concerns the British economy could be worsening as result of the current eurozone crisis have led to vulnerabilities in the pound today (December 2nd).

A warning from Bank of England governor Mervyn King that the UK is in an "exceptionally threatening" situation weakened the currency.

However, there was some positivity among investors as they welcomed a joint decision from several banks to inject liquidity into the global financial system.

Ian Stannard, European head of FX strategy at Morgan Stanley, said: "Going into next week the risks are still going to be running very high."

He added traders are still disappointed by the overall outcome of the recent summit regarding the sovereign debt situation.

Sterling made gains of 0.1 per cent yesterday after Spanish debt yields remained low and the country managed to sell its maximum targeted amount of debt at auction.

Posted by Chris Weaver ADNFCR-1681-ID-801228513-ADNFCR - Knowledge to Action News

02-12-2011

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