The pound has gained a little against sterling and the dollar as a larger than expected US trade deficit drove the currency down.

The pound closed at 87p against sterling yesterday from 86.85p a day earlier and at $1.4240 from $1.4099.

Mr Kevin Daly, economist at Ulster Bank, said the Asian crisis had hit US trade far quicker and more substantially than the market had been expecting.

The US March trade deficit came in at $13 billion, larger than the $11.6 billion expected. The 7 per cent increase was despite beneficial once-off factors including terms of trade on oil prices and up to $1.6 billion on the timing of Boeing export orders.