Pound Gains on Stock Market Optimism

The Great Britain pound gained today against the other major currencies as the growth on the global stock markets spurred optimism and the high-yielding pound showed a stronger reaction to this uprise.
The British currency was among the worst performers of the last two months when the credit crunch went deep into the global economy. The United Kingdom has one of the highest interest rate (4.5 percent) among the major economies and it’s currency was one of the first to fall when the high-risk assets were dumped by the investors.
The today’s growth in the Asian stock markets and the positive opening of the European markets contradict the analysts’ expectations that the macroeconomic indicators will continue to worsen worldwide.
The Bank of England will meet this Thursday to decide the next interest rate; the median forecast by the major market strategists show that the rate will be cut by the 50 basis points to 4 percent. Such a rate reduction will be most likely considered as a positive news for the pound as it will help to fight the financial crisis.
GBP/USD rose from 1.6100 to 1.6217 as of 9:47 GMT today. GBP/JPY went up from 158.29 to 160.97, while EUR/GBP declined insignificantly from 0.7923 to 0.7922 after reaching a daily bottom at 0.7844.

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