Sterling’s early optimism faded as the banking sector came back under pressure. All eyes are on HBOS, which are seen as the most vulnerable in the current climate. Share in the group rose 14% early on, in a knee jerk response to the AIG rescue, but speculative selling has been relentless to send shares down 35% on writing. Cable reacted adversely to the movement in U.K. banking stocks and gave back all of its early gains to trade back under the 1.7900 handle to hit 1.7870 European session lows.