Sterling climbs on economic optimism

LONDON: Sterling hit a five-month high against the dollar on Wednesday as investors shrugged off dovish comments from the Bank of England and resumed their optimism in the wake of a run of encouraging UK economic data.
BoE Governor Mervyn King said Friday's strong second quarter growth data does not mean rate setters should put their foot on the brake. He warned risks remained to the recovery and said monetary policy could go in either direction.
This contrasted with weak US durable goods orders data on Wednesday, which added to a string of recent data pointing to a struggling US economy.
Sterling rose as high as $1.5638, its strongest since mid-February. By 1504 GMT, it was up 0.2 per cent at $1.5623.
Support for sterling was seen around the $1.5555 area, the 200-day moving average which the pound managed to break through and close above on Tuesday for the first time since January.
That level also marked the 50 per cent retracement of sterling's peak-to-trough move between November 2009 and May, leaving the 61.8 per cent retracement at $1.5870 as the next target.
The euro traded at 83.30 pence, retreating from the day's high of 83.68 pence hit after King's comments, while trade-weighted sterling rose to a near four-week high of 81.9. King's comments were part of testimony by UK policymakers before the UK parliament's Treasury Select Committee. -Reuters