Page last updated at 19:59 GMT, Monday, 1 June 2009 20:59 UK

Pound at seven-month dollar high

Pound coin rests on dollar notes

The pound has risen to a seven-month high against the dollar, as the greenback continued recent falls.

In Monday trading, one pound was worth $1.6433, its strongest position since early November last year.

The euro was also up against the dollar, with one euro worth $1.4246 at one point, a six-month high.

The dollar has fallen on signs the global economy is improving. This makes currency traders more confident to switch to higher-yielding currencies.

This is the case for both the pound and the euro, as UK and eurozone interest rates remain higher than in the US.

While US interest rates are currently between 0% and 0.25%, UK rates are at 0.5%, and the eurozone level is 1%.

The latest upbeat global economic data has come from both the European Union and China.

Manufacturing output across both the eurozone and China was better than expected in May.

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