On Tuesday the British pound has reached seven-week high vs the dollar, but gains were limited due to mounting uncertainty over the timing of the Bank of England's possible rates hike.
GBP/USD hit 1.5813, the highest level since June 23 and was last at 1.5792, up 0.09% for the day.
Fears over a global economic collapse have been prevailing in the financial markets recently, with the biggest worry being a slowdown in China’s economy which accelerated a selloff across global markets.
Asian and European stocks rebounded on Tuesday, but shares in China and Japan continued to slump, with the Shanghai Index 7.63% lower and Nikkei down 3.96%.
London's FTSE 100 is gaining momentum, rising 160 points, or 2.7%, to 6,058 points. That's made up some of the sharp losses posted on Monday. Glencore remains the biggest riser, while Rangold is now the sole faller on the blue-chip index, BBC News reports.
Lingering uncertainty over the global economic environment has prompted investors to push back expectations on the timing of an initial rate hike by the Bank of England to the third quarter of 2016 from earlier in the year.
On Monday U.K. Chancellor George Osborne cautioned that Britain’s economy was exposed to a global slowdown, noting, however, that he was still “reasonably confident” there would not be “immediate sharp problems in Europe”.
Sterling regained ground against the euro, with EUR/GBP down almost 0.9% to 0.7303 after dropping more than 2% to a two-month low of 0.7421 in a prior session.
The dollar also rebounded, recovering from the eight-month lows set on Monday.
