by Adam Solomon
Sterling / Euro and US Dollar
The Pound declined against the majority of the 16 most actively traded currencies this morning, as concerns grow over the bleak outlook for the UK economy. The FTSE 100 Index swung between gains and losses this morning but the Pound bounced back above 1.6150 against the Dollar by midday, after the French president Nicolas Sarkozy said a “breakthrough” has been on a resolution to the Greek debt crisis.
The subsequent improvement in risk appetite saw the Dollar decline against the Pound and the Euro, amid suggestions that a solution involving holders of Greek bonds in a rescue package for the struggling nation has been found. The Euro also made strong gains against the Pound, increasing 0.5% this morning, as the focus turns to the possibility of an ECB interest rate increase next month.