The pound moved ahead against the deutschmark on international currency markets following a rising sterling, writes Mary Canniffe. The pound closed just over two pfennigs stronger at DM2.6720 and marginally weaker against a stronger sterling at 91.20p in late trade.
Sterling opened weakly on international currency markets slipping back to DM2.8950 in early trading. But big buy orders from the eastern markets lifted the currency later in the day and sterling closed at DM2.9270.
Sterling and the dollar benefitted from negative sentiment towards the D-mark. Traders and analysts blamed the D-mark's decline partly on growing speculation that the euro may be a soft currency.
In the US, economic statistics released yesterday were in line with expectations. The consumer price index rose 0.2 per cent in July while the core rate, which excludes food and energy, was also up 0.2 per cent last month. The figures provided further evidence that inflation remained well under control despite steady growth and low unemployment. Year-on-year, the July CPI was up 2.2 per cent compared with a rise of 3 per cent a year ago. The July core rate was up 2.4 per cent year-on-year, compared with a rise of 2.7 per cent a year ago.
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