The pound climbed today versus most of the 6 main traded currencies as the situation starts to become more positive for the British economy, pushing stocks up in London and consequently attracting international inflows of capitals to the United Kingdom.
After U.K. manufacturing output had the highest climb in 18 months today in a report published by the Office for National Statistics, the pound rose sharply, gaining virtually against all 16 main traded currencies worldwide, rebounding from a rather weak performance last week, when a wave of pessimism still affected pound-priced assets attractiveness. Stocks in the U.K. rose to the highest level since October last year, when the credit crunch plunged the British Isles into a intense sequence of losses in multiple bearish market weeks. U.K. manufacturing went much beyond forecasts, which suggested a 0.3 percent increase for the past month, but the actual report indicated an amazing 0.9 jump, being this surprising figures the main vector to push the pound up today in foreign-exchange markets.
According to many analysts, the pound remains undervalued, still suffering the consequences of the credit crunch that caused the biggest crisis in the country since the Second World War, but if favorable news still follow, the pound may find support for a big uptrend in the following months.
GBP/USD traded at 1.6554 as of 12:41 GMT from a previous rate of 1.6382 yesterday. EUR/GBP traded at 0.8744 after being traded at 0.8777 before the report was published.
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