The Sterling climbs against the greenback as risk for appetite increases

The pound climbed against the dollar and euro on speculation rising stocks are reviving risk appetite, boosting demand for the British currency. U.K. policy makers cut rates on Oct. 8 in concert with other major central banks in an effort to stave off a collapse of the financial system. The Bank of England meets on Nov. 6 to decide interest rates, economists traders predict the BOE will cut the rate by half a percentage point. Britain's economy is shrinking amid the fallout from the global credit crisis. A government report Oct. 24 showed a greater-than-forecast 0.5 percent contraction in the third quarter. The GBP/USD is currently trading at $1.6275 as of8:29am, GMT.

U.S. employers probably eliminated jobs in October for a 10th consecutive month, while manufacturing contracted at the fastest pace since the 2001 recession, economists said before reports this week. The loss of almost one million jobs, falling property values, slumping stocks and frozen credit may cause consumers and businesses to keep retrenching. The state of the economy gave Democrat Barack Obama a lift over Republican rival John McCain as Americans, who will elect a new president tomorrow. ``Unemployment is likely to rise sharply over the next several months as repercussions from the credit crisis ripple through the economy,'' said Russell Price, senior economist at H&R Block Financial Advisors in Detroit. ``The economy is the most important issue on the minds of voters.'' EUR/USD is currently trading at $1.2820 as of 8:36am, GMT.

The yen fell against the dollar and the euro as a rally in Asian stocks encouraged investors to step up purchases of higher-yielding assets financed with the Japanese currency. ``Risk sentiment seems to be improving because of strong hopes for central banks' rate reductions,'' said Takashi Yamamoto, chief trader at Mitsubishi UFJ Trust & Banking Corp. in Singapore. ``The yen is being sold.'' The USD/JPY is currently trading at 99.25 as of 9:02am, GMT.

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