British Pound High on Giant Airlines Fusion

The British pound had an excellent performance in the beginning of this Friday’s session as talks that the biggest airline in the country will merge another European giant in the sector brought optimism to London equities markets making the pound to benefit of a positive scenario.

After British Airways Plc and Iberia Lineas Aereas de Espana SA, two of the biggest airlines in Europe decided to merge, the pound headed to a third straight winning week versus the U.S. dollar and gained terrain versus the euro, which according to some speculations could reach parity with the pound in the mid-term future. An optimism tone today in Britain regarding the economic recovery that is coming slower in the country than in other countries in Europe provided support for the FTSE 100 Index to post a second week of consecutive gains, giving a breather for the pound which is finally having a more sustained growth these past weeks.

The economic recovery in Britain is finally affecting markets sentiment, the fusion of 2 giant airline groups is an evidence that other merges can follow as long as the economy continues to grow, which is definitely favorable not only for the British currency, but also stocks in London, which have been last attractive than stocks in other European economic centers like Paris or Frankfurt.

EUR/GBP traded at 0.8915 as of 13:27 GMT from a previous rate of 0.9017 in the intraday comparison. GBP/USD traded at 1.6682 from 1.6545 yesterday.

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