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LONDON: Sterling rose one per cent against a broadly weaker dollar and outperformed the euro on Thursday as investors looked to push the currency higher in a choppy market, offsetting disappointing UK housing data. Nationwide data showing UK house prices in October fell for the third month in four earlier knocked the pound to session lows, but traders said persistent buying from Middle East accounts helped it rebound higher.
The pound climbed to a 10-day high of $1.5954, with gains accelerating after stop loss orders were triggered through $1.5900 and $1.5910 as the dollar weakened versus a basket of currencies. By 1504 GMT, it was up 1 per cent at $1.5935.
“These are intra-day fast money flows. There’s a lot of stop hunting going on, people are looking for targets and trying to push sterling in the direction they want,” said Peter Luxton, a market analyst with Informa Global Markets.
Traders said a buy sterling, sell euro order at the 1215 GMT fix also helped the pound rally. The euro traded down 0.1 per cent at 87.25 pence.
Sterling’s broad gains took it to a three-week high on a trade-weighted basis of 80.0.
Analysts said trading volumes were thin, however, as most investors were sidelined ahead of a key US policy decision next week, with uncertainty about how much quantitative easing the Federal Reserve will opt for keeping them cautious. “No one really wants to stay in extended positions ahead of next week,” Luxton said, adding he expected sterling to stay choppy and range-bound between $1.5700 and $1.6000 over the next few days. -Reuters


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