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Despite its losses against the euro, sterling hit its highest point versus the dollar since February as the US unit slumped broadly as news of the aid plan increased demand for riskier assets, tarnishing the dollar's safe-haven appeal.
Eurozone finance ministers at the weekend approved a 30 billion euro ($40.5 billion) package of loans for Greece if it needed help in tackling its debts, with at least 10 billion euros also expected from the International Monetary Fund. Sterling extended last week's short-covering rally versus the dollar as speculators continue to unwind bets for more pound weakness. The latest data shows such positions further decreased last week from a record high in March. "An unwinding in the risk premium due to the Greece issue in general is slightly supportive for sterling, especially against the dollar," said Adarsh Sinha, currency strategist at Barclays Capital in London."You could (also) argue it is partly because of a liquidation in short positions.
