German consensus buoys euro
The emerging consensus in the German legislature over who will govern the country gave the euro a boost while the pound made a minor recovery.
This morning the euro stood at $1.2054 and at 0.6829 to the pound.
After a period of relative inactivity - punctuated by weakness precipitated by the lack of clarity in the German election outcome - the euro made gains yesterday as German Chancellor Gerhard Schroeder neared agreement with challenger Angela Merkel of the Christian Democrats.
The two parties met this week to discuss the potential for forging a government and establishing plans for economic and social reform - helping to buoy the single currency after a 1.6 per cent fall against the dollar last week.
Citigroup's Marvin Barth told Bloomberg that indications that Germany is "getting its political act together" should "help out the euro".
Meanwhile the pound picked up on news that mortgage lending and approvals had performed better than expected during August.
However, despite the boost offered by the positive economic news, analysts were skeptical of the long-term implications of the figures from the Bank of England with sterling likely to change trajectory on further data.