Pound Breaches USD1.60

The pound broke through $1.60 against the US dollar for the first time since early November Wednesday after strong US consumer confidence numbers last night revived hopes that the worst of the recession is over.

A renewed appetite for risk seems to be emerging, meaning that the dollar is losing it's safe-haven status.

The head of the OECD, Angel Gurria, said last week that economic indicators were beginning to pick up and the world economy was no longer in a free fall. US house sales are turning up, as too are Chinese exports he said.

Meanwhile investment firms didn't feel the need to dip into the Fed's emergency loan program at all last week, that's the first time that has happened since September.

It's early days to say that the UK economy has bottomed, but there seems to be a bit more of an air of optimism around this morning.

That will knock the recent wheat rally of course, London wheat has opened with November down 50p at GBP129/tonne.