The British currency, unable to capitalise on strong early gains, lost ground against the euro yesterday, as an easing of risk appetite wore heavily on the fragile pound.Initially, sterling extended Tuesday’s rebound following a surprising jump in UK consumer sentiment, posting its biggest monthly boost in more than 14 years and signalling growing optimism about the UK economy. Additionally, the pound found support from signals that the Bank of England may not cut its bank reserves deposit rate anytime soon. In the afternoon however the pound gave up its gains, as weak US data brushed off on equity markets and sent the pound back down to a close of 1.0915.
Posts Tagged ‘Uk Economy’
Sterling relinquished strong gains vs euro yesterday as risk appetite eased
Posted by admin on October 1st, 2009
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The UK economy is showing signs of recovery, which has buoyed the ailing pound
Posted by admin on September 30th, 2009
In trading yesterday the pound picked itself up from 6-month lows against the single currency, gaining 0.7% as positive data buoyed investor sentiment. In a final revision, Britain’s second quarter GDP figure was reported as -0.6%, up from a previous revision of -0.7% and strengthening claims that the UK will exit recession in the third quarter. There was also positive data from the UK CBI retail sales index, which showed considerable improvement from last month, reaching levels well above expectations. Additionally, lending to individuals rose in August, reflecting both an increase in the willingness of high street banks to extend credit, and also improved consumer confidence in the market as they begin to take on more debt.
Pound Tumbles, Dollar Surges as Risk Aversion Hits Currency Markets (Euro Open)
Posted by admin on September 28th, 2009
The US Dollar surged higher to start the trading week as stocks sold off across Asian exchanges, boosting demand for the safety-linked currency. The British Pound bore the brunt of the greenback’s assault as risk aversion compounded last week’s dovish rhetoric from the Bank of England.Key Overnight Developments• Pound Tumbles Despite BOE Backtracking on King’s Comments• Japanese Yen Surges on Safety Demand as Stocks Plunge in AsiaCritical LevelsThe British Pound and the Euro both suffered sharp losses in overnight trading as stocks tumbled in Asia, driven lower by Friday’s disappointing US economic data, sending the MSCI Asia Pacific regional benchmark index down 1.2% and boosting demand for the safety-linked US Dollar.Asia Session HighlightsThe British Pound raced sharply lower in early trading as currency markets seemingly concluded that the Bank of England suspiciously “protests too much” after the UK Times Online cited unnamed sources at the central bank as saying King was trying to talk down sterling last week.
Sterling continued to slide vs the euro on the run up to the weekend, but has capped its losses this morning
Posted by admin on September 28th, 2009
Sterling fell yet further on Friday on perceptions that the UK currency would be allowed to weaken to help the fragile British economy. The pound dropped to a fresh five-month low against the euro on Friday as traders continued to sell sterling following comments from Mervyn King that sterling’s fall was helpful in rebalancing the UK economy. Some analysts have suggested that these comments which have undermined the UK currency, have become a new policy tool with which the central bank can kick-start the economy. Pressure on the pound was also stemming from the UK’s budget deficit and continued speculation that the BoE might yet loosen monetary policy further.
The pound’s decline continues, as confidence in the currency is undermined
Posted by admin on September 25th, 2009
Sterling went into its steepest daily decline against the single currency in 5 months yesterday, losing 1.2%, after Mr. King revealed that he was content with the current value of the pound. Sterling hit its lowest euro price since early April, extending broad losses after Mervyn King said that a weak pound was supporting a necessary rebalancing of the UK economy.The euro was also supported by a further rise in business confidence in Germany. Although expectations for the Ifo economic survey were not matched in September’s report, the modest increase reflected optimistic future expectations for economic recovery.Demand was further eroded as the Daily Telegraph reported yesterday that the Bank of England was set to meet with economists in a “crisis” meeting designed to stem alarm and confusion over the QE program and the weakness of the pound.Additionally, once the pound broke below the 1.10 level, automatic sell off points were triggered, driving sterling down to a near six month low of 1.0922.The pound has slid further in trading this morning, losing another 0.5%, and currently trading around 1.0900.
The pound has failed to sustain yesterday’s rally against the aussie, plummeting over 2 cents so far this morning
Posted by admin on September 24th, 2009
The pound shot higher against the aussie yesterday after suspicions were quashed that the Bank of England may have recently considered further easing. Minutes from the latest MPC meeting revealed a more encouraging note upon the prospect of the UK economy, and signaled that currently no further extension of loose monetary policies were necessary, which supported demand for the pound.Additionally, the rise of recent risk appetite took a brief pause as traders awaited an interest rate decision from the Fed, which weakened demand for higher-yielding currencies.However, during Asian trading, the Tokyo’s Nikkei index rose 0.9% in its first day of trading following a three day holiday, which encouraged investor demand for the aussie, pushing it higher, and currently trading 0.7% up for the day.The aussie was also supported by a US statement that rates would remain low for some time, which buoyed investors to resume selling the US dollar in favour of higher-yielding currencies.
The dollar climbed yesterday and has continued to do so strongly in trading this morning
Posted by admin on September 24th, 2009
Having rallied strongly in the morning, the pound relinquished its gains as equities fell, with the pair closing marginally down at 1.6339. In European trading hours, the pound continued to advance after the Bank sounded a relatively bullish note on the economy, saying there had been a “number of developments during the month with positive implications.”There was also no sign that the Bank discussed cutting the interest rate it pays on commercial bank deposits in an effort to boost lending in the UK economy, which Mr. King had spoke of last week, adding downward pressure to the pound.However, the pound lost around 0.75% of its value in the evening as the surprise fall in equities quelled demand for riskier assets.Additionally, the Fed statement in the evening had sounded a more hawkish tone than some had expected, despite confirming that rates would remain at near zero for an “extended time,” which also cautioned traders against over selling the dollar.
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