After posting a negative performance last week versus its main rivals, the euro and the dollar, the pound had a breather today as risk appetite returned to equities and commodities markets, providing support for the U.K. currency to pare much of its losses versus the greenback and halt an advance of the European common currency.
The British pound posted the best performance today versus the Japanese yen, a refuge currency that lost attractiveness today as risk appetite returned to stock markets helping the FTSE 100 Index of stocks to post gains over 1.5 percent. Virtually all types of commodities rose today after a considerable decline in the end of the last week, when a decline in the crude oil rates was one of the main factors bringing risk aversion among traders. The U.K. financial scenario is expecting a GDP quarterly report to be published later on this week, which will definitely determine the pound’s trend and outlook for this week, since concerns regarding the country’s economic recovery still high.
Stocks are the main reason behind pound’s excellent performance today in currency markets, according to most of the analysts. Expectations are that the GDP quarterly figures can bring another good surprise for the U.K.’s currency, and this can be already perceived on the pound’s charts.
GBP/USD advanced to 1.6637 as of 14:41 GMT from an opening rate of 1.6482 yesterday. GBP/JPY touched 147.67 from 146.49.
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