Pound pushes through 1.60 USD mark

The pound has pushed through the 1.60 dollar mark for the first time in seven months

Travellers to the US were given a boost as the pound pushed through the 1.60 dollar mark for the first time in seven months.

Sterling, which slumped to its lowest level for nearly 24 years against the dollar in January, climbed back above the psychologically important level as traders' increasing appetites for riskier investments kept the greenback under pressure.

The pound also edged up against the euro, reaching nearly 1.15 euros at one point - the highest level since February.

Analysts said the main cause of the movement between the dollar and pound was a shift away from the US currency.

Mark O'Sullivan, of Currencies Direct, said the move represented a return to risk for investors who have stashed their money in the dollar since October.

"It is a really good indicator of fear and greed and now greed is back in the market, sterling is doing well," he said.

Mr O'Sullivan said the pound's climb to the 1.60 dollar mark had come much faster than his predictions - which anticipated the currencies would be at this level by the end of the year.

He said sterling was approaching a more normal "fair value" with the dollar, which he saw at about 1.65 dollars. But he said the pound's rise against the euro "has a lot further to go", reaching a level of around 1.25 euros by the summer or autumn.

The pound plummeted against the euro as the financial crisis took its toll, almost hitting parity at the end of last year. But potential problems among the eurozone countries have seen it stage a tentative comeback.

Sterling hit a low of 1.35 against the greenback in January - a far cry from its two dollar high the previous year - but has since made a reasonably steady recovery, accelerating in recent weeks.