LONDON, Feb 9 - The pound rose to its highest in 11 years on the U.S. dollar in early European trade on Monday as the market tested the Group of Seven's reworked stance on dollar weakness and currency market volatility. G7 finance ministers said in a statement after a weekend meeting that excess volatility and disorderly currency movements were undesirable and called for more currency flexibility in major economies or regions that lacked that flexibility. This was short of outright support for the falling dollar but was as far as many in the market had expected the ministers to go.
"Realistically we weren't going to get more (dollar supportive comment from the G7) than what we got. Clearly that wasn't enough," said Lee Ferridge, global head of curency strategy at Rabobank. The pound climbed to $1.8593 , the highest it has been since the pound exited Europe's exchange rate mechanism in 1992 It was 0.6 percent higher from late Friday's closing levels in New York.//www.reuters.com