Sterling gains against the Dollar as stocks rise

The pound rose against the dollar on speculation rising stocks are reviving risk appetite, boosting demand for the U.K. currency. The U.K. government will cut taxes for families, the elderly and small businesses and maintain ``high'' public spending by increased borrowing, the Daily Telegraph reported yesterday, without saying where it got the information. Chancellor of the Exchequer Alistair Darling will announce the plan in a pre-budget report next week, the newspaper said. ``We stand ready to urgently take forward work and actions agreed by our leaders to restore and maintain financial stability and support global growth,'' the group of 20 nations said in a statement released yesterday following a meeting in Sao Paulo. The GBP/USD is currently trading at $1.5740 as of 8:19am, GMT.

The greenback may rise to 100.55 yen this week, said Kengo Suzuki, currency strategist at Shinko Securities Co. in Tokyo, citing technical charts. Resistance at 100.55 yen is the dollar's high on Nov the 4th. The Dollar is poised to gain after breaking above its 20- day moving average, he said. The currency may also advance as its daily stochastic and moving average convergence/divergence charts are showing buy signals, Suzuki said. Should the dollar climb above 100.55 yen, it may then move to its Oct the 14th high of 103.07, he said. ``We can see the dollar slowly breaking above the 20-day moving average after remaining below that level for the past few months,'' Shinko's Suzuki said. ``The buy signals on stochastics and MACD are encouraging. This move may have further to run.'' The USD/JPY is currently trading at 99.14 as of 8:52am, GMT.

Gains in the euro may be curbed after European Central Bank President Jean Claude Trichet told Brazilian broadcaster Globo TV that he can't rule out a further rate reduction. ``There's talk of more ECB rate cuts, given the pessimistic outlook on Europe's economies,'' said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. ``The medium- to long-term downtrend for the euro is likely to persist.'' The EUR/USD is currently trading at $1.2870 as of 9:05am, GMT.

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