US Dollar Continues To Decline

The pound is up again this morning against an ever-decreasing US dollar, hitting $1.6660, it's highest since Oct 30.

In the US, news last night that pending home sales jumped their highest in seven years, added to the belief that a global recovery is underway.

That sent to dollar lower, a world economic recovery equates to a return to risk, hence a lack of enthusiasm for the dollar's safe haven status as investors look for higher yielding assets.

Also at the forefront of investors minds is that "payback time" is somewhere down the road for the US, burdened with huge deficits and loans.

South Korea has already said that it will scale back the extent of it's holding of US Treasuries. China would like to cautiously and quietly do the same, but with $760 billion tied up, will be wary of starting a stampede.

Meanwhile also helping the pound was news that UK consumer confidence picked up in May to the highest level in six months, according to the Nationwide Building Society. Although the accompanying comments from the Nationwide's chief economist were suitably guarded:

"While some reports suggest tentative signs of a slowing in the pace of economic decline, it is important to remember that a number of sectors are continuing to contract and any recovery is likely to be sluggish," he said.