The British pound had a day of gains versus the euro and the dollar as a new wave of risk appetite struck markets today, influencing investors to purchase assets in British stocks, weighing positively on the national currency.
Todays gains trimmed the pound losses against the euro this week, in the first negative seven-day period in almost two months, as the FTSE 100 Index climbed 1.3 percent, in a wave of optimism that triggered investors to purchase British assets priced in pounds, favoring the national currency. The pound has been through difficult times with multiple domestic and international factors weighing on its rates, as a political crisis in the parliament added to weak economic data made investors to give up the pound in exchange of the yen, in bearish market days, and to higher-yielding options, when stocks and commodities rallied. Now the situation for the pound has improved as the political situation stabilized and the wave of optimism brought traders back to pound priced positions.
Economists stress on the negative factors who are weighing on the pound, as the U.K. fiscal and debt situation, which even if still influencing the British currency, were not able to contain traders risk appetite who pushed the pound against a number of major rivals.
EUR/GBP fell to 0.8529 as of 10:55 GMT from 0.8560. GBP/USD rose to 1.6497 from 1.6240.
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