Pound gains on the dollar again

The pound ascended to a 10-week high compared to the dollar on Tuesday, but more gains are limited due to concerns over Portugal’s debt woes.

The pound hit 1.5797 against the dollar in the morning, the highest since November 21; but consolidated at 1.5776, reports the website Forex Rate It.

Early gains were also made by the pound against the euro following Greek Prime Minister Lucas Papademos’s comments that negotiators were making "significant progress" in talks about the Greek debt crisis and that an agreement was likely by the end of the week.

Market sentiment was also enhanced following the agreement of EU leaders on fiscal union pact, as well as the completion and signing of details relating to 500 billion euro bailout fund for area that will take effect in July. However many investors continued to be wary over uncertainty in Portugal, which may soon need a deal restructuring their debt.

Lending remained subdued in the UK in December, increasing by just GBP0.4 billion, a long way below the expected. GBP1.2 billion increase. A new report revealed that UK consumer confidence has risen to its uppermost level in the last seven months, which may partly explain the pound being slightly higher compared to the euro at 0.8360.