The pound is finally rising against the dollar

The pound was worth $1.6664 against the dollar and 1.16 against the euro on Wednesday morning as recent data suggested the UK’s recession was easing slightly and buoyed confidence in the market.

The purchasing managers’ index (PMI), a survey that measures aspects of the economy, rose from 48.7 last month to 51.7 in May for the services industry in the UK.  A result over 50 indicates growth rather than contraction, and this is the first time it has been over 50 since March 2008.

Separately, a survey conducted by Nationwide showed UK consumer confidence at the highest for six months, with people expressing confidence about the future of the economy.

Currency strategist Ian Stannard said, “Sterling has accelerated to the upside over the course of the last few days.” But he added that it was not only a UK story as a “global liquidity story, and as long as risk appetite continues to hold up, sterling will continue to benefit as a cyclical currency.”