The U.K. currency start this week falling versus the euro and several other currencies as report showed a decline in the domestic consumer confidence, indicating that the U.K. still hasn’t managed to surged from recession, forcing stocks in London down as well.
The pound fell versus virtually all main traded currencies as the consumer sentiment unexpectedly fell, posting its first decline in 10 months and surprising traders in the U.K. negatively, declining attractiveness for the currency which has been one of the worst performers this year among the 6 majors. Even if the U.K. produced favorable numbers regarding the real estate markets, as the number of mortgage approvals increased as well as the price of houses, the euro advanced versus the U.K. currency, since a report indicated an advance in consumer prices in the region, suggesting that the pace of recovery is stronger in the Eurozone than in the United Kingdom.
The consumer confidence contraction can be interpreted as a consequence of a delay in the expected economic recovery in the U.K., which has not been as resilient as the other countries in the region, with rather deep political crisis and a more complicated situation in the financial sector, since the bubble before the crash was bigger in the U.K. than in the rest of Europe, setting the pound outlook to a rather uncomfortable position.
EUR/GBP traded at 0.9114 as of 13:59 GMT from an opening rate of 0.9081 yesterday. GBP/CHF touched 1.6528 from 1.6599.
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