Sterling gained against the dollar this morning as the safe-haven greenback fell against most currencies as market sentiment improved on hopes that China would ease its strict COVID-19 curbs.
The British currency in recent weeks has been more responsive to broad shifts in risk sentiment than the European common currency, and the pound also gained a little on the euro which dropped 0.1% to 86.46 pence.
Global shares and commodities rallied following a rebound in Chinese stocks and the yuan as investors bet signs of civil discontent could prompt an easing of China’s strict COVID-19 curbs and cheered a relaxation of regulations on developer fundraising.
Lower than expected inflation figures from Spain and Germany’s most populous province also helped improve the mood.
Investors in Britain are also keeping an eye on an appearance by Bank of England Governor Andrew Bailey before lawmakers in the House of Lords on the off chance of any shift in rhetoric ahead of the Bank of England meeting in two weeks’ time.
Euro zone economic sentiment rebounded in November slightly more than expected, data showed today, rising for the first time since the Russian invasion of Ukraine in February on more optimism among consumers and in services.
The European Commission said its economic sentiment indicator rose to 93.7 in November from 92.7 in October, marginally beating consensus estimates in a poll of economists of a rise to 93.5.