The pound climbed today versus the yen and the dollar, as optimistic reports in Europe brought worldwide traders to bet in a hastening economic recovery in the region, damping demand for safer assets and increasing risk appetite.
The pound benefited today from a report in Germany indicating an unexpected growth of 0.3 from the first quarter, being the same figures also perceived in France, while forecasts indicated a contraction of 0.3 percent for both countries. The pound also benefited today from an improved sentiment in stock markets that pushed high-yielding currencies like the South Korean won to the highest rise in a week, making investors which were again confused by negative reports to return to riskier positions in search for higher yielding operations.
Today’s reports in both Germany and France, were highly unexpected and changed traders, investors and analysts perspectives regarding the future economic conditions in the European Union, since these countries lead a main role regarding the bloc’s financial health, and a rebound in the region must derogatorily rely on their stabilization. Despite this fact, the United Kingdom has a more delicate financial system and current situation than the Eurozone, being the credit system more similar to Eastern European countries, which may result in a longer period of recession for both regions than for the countries which adopted the euro.
GBP/USD traded at 1.6619 as of 11:32 GMT from 1.6439 in the intraday comparison, GBP/JPY followed from 157.32 to a current price of 159.91.
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