The pound has gained two cents against the dollar in early morning trading after news that the UK government is in talks with investors to sell stakes in part-nationalised banks, says London foreign exchange trader Currencies Direct.
 
Mark O’Sullivan, director of dealing at Currencies Direct, says, ‘Following talks that the UK government may look to sell off some of its debt obligations with the UK banks, sterling has surged overnight and is up two cents against the dollar at $1.5465.

‘The ongoing stock market rally is also a positive for sterling and we are now seeing the pound trade at a level that has not been seen since December 2008 – a long way from the lows of $1.34 to the pound back in January.’

He adds, ‘There is no doubt that the UK economy is still in a bad way, but currency markets are taking the view that sterling will outperform both the dollar and the euro going forward, especially when you take into consideration the economic numbers coming out of Europe, which still indicate a long, prolonged slump in the euro zone.’