Pound Bounces Up on Stock Market Growth

The British pound showed the first daily gain today after three consecutive losses against the U.S. dollar as the country’s stock market showed an unexpected growth.
The pound sterling also rose against the Japanese yen — for the first day this week after the FTSE 100 (the Britian’s stock market benchmark index) went up by more than 1.5 percent during the early trading session. The pound advanced against the euro snapping its yesterday loss after the reports showed that the new cars registrations fell significantly in European Union in January.
The Eurozone’s weakness appeared to be the pound’s strength — both German and French GDP reports for the fourth quarter of 2008 showed declines that exceed the average forecasts by the market analysts. The German economy shrank by 1.7 percent in a year-to-year comparison in Q4, while French one decreased by 1 percent.
Despite the problematic situation in the world’s economy, investors seem to be leaning toward the risky assets today and while the Eurozone’s reports scare off the majority of the traders, the United Kingdom offer them a high-yielding but not-so-risky opportunity. But, of course, such a growth can’t be sustainable and Forex market participants should be careful buying a currency that was one of the worst performers recently.
GBP/USD rose from 1.4284 to 1.4462 as of 8:42 GMT today. GBP/JPY advanced from 129.78 to 132.18, while EUR/GBP fell from 0.9019 to 0.8936 today.

If you have any questions, comments or opinions regarding the Great Britain Pound,
feel free to post them using the commentary form below.

Leave a Reply

Your email address will not be published. Required fields are marked *