Sterling up as risk appetite outweighs weak data

LONDON, April 30 (Reuters) - Sterling rose versus the dollar and euro on Wednesday, as strong equity markets and improved sentiment about global economic growth boosted risk appetite.

The pound, with interest rates of 5 percent, benefits from the relatively risky carry trade where investors borrow low-yielding currencies to fund purchases of higher yielding assets.

Risk appetite improved as sentiment about the global economy was cheered by U.S. data showing a surprise rise in private sector jobs this month and faster than expected first quarter gross domestic product (GDP) growth.

That helped push up sterling and other high yielders, the Australian and New Zealand dollars.

"The fact the U.S. GDP did not print negative seems to be driving the carry trade," said Geoff Kendrick, currency strategist at Westpac.

By 1421 GMT, the pound was up 0.33 percent at $1.9761, and the euro was down 0.3 percent at 78.77 pence EURGBP=.

Sterling was up 0.8 percent against the low yielding yen to 206.68 yen GBPJPY=R.

The carry trade overshadowed weak UK data, which had earlier sent the pound to a two-week low of $1.9626.

British consumer confidence sunk to its lowest level since the economic slump of 1992 in April, while house prices posted the first annual fall in more than 12 years [ID:nL30794856].