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Stock market fears of weak economic recovery on Monday created risk-averse trading patterns, but confidence improved today as the after effects of poor market reports wore off.
Royal Bank of Scotland currency strategist Paul Robson told Reuters: "Players may be positioning themselves for a tentative recovery in risk appetite."
The Forex expert noted while sterling may be outperformed by commodity currencies, it could give a better showing when compared with Japanese yen and the beleaguered dollar.
Morning trade on the stock exchange saw British shares gain 1.5 per cent, following an upturn of Asian trade and growth-linked stocks capitalising against the US money.
Euro buying and selling also demonstrated renewed vigour, as the European tender rose 0.2 per cent to 83.1p.
This is its best performance for three trading days, but analysts said the positive movement would not be confirmed until the currency rose above the 84p mark.
Posted by Chris Weaver
