FX round-up: Dollar gains, sterling dives

Date: Tuesday 02 Mar 2010

The dollar gained against the euro after a string of US economic reports and as the possibility of a bailout for Greece lingers.

Uncertainty remains however after German Chancellor Angela Merkel's comments at the weekend that Greece would have to deal with its debt problems on its own.

The dollar was boosted by upbeat economic data on manufacturing and consumer spending, sending the dollar index, which measures the US currency against a basket of six others, above 81 before settling around 80.753.

Meanwhile the pound came under some heavy selling on fears about a hung parliament. Economic data provided some cheer although M4 money supply data highlighted weakness and deepened concern that the Bank of England would consider extending QE at this week’s meeting.

The pound hit a low of 1.4783 against the dollar. The greenback was up 0.1% at 89.06 yen.

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