Pound Down on Chinese Comments

The U.K. currency posted losses today versus the euro and the greenback as stocks declined in the country and the Chinese Premier Wen Jiabao affirmed that the world economy is still facing a period of uncertainty, which brought risk aversion back in trading markets.
A reversal trend in equities markets pushed the British currency down and the MSCI World Index lost consistently mainly influenced by Asian stocks, who had a negative day after Chinese Premier Wen Jiabao made pessimist remarks towards the future of the world economy. The pound also lost consistently versus the euro as the Eurozone economy is showing signs of better economic performance than the British Isles, fact which is leaving room for speculations that interest rates will remain at record low levels set by the Bank of England this year.
p;Chinese declarations today affected the already faltering performance of the British currency, which is still declining as a consequence of BOE’s quantitative easing policies, which so far have been unable to rescue the U.K.’s economy from the worst recession in 60 years. The pound is likely to remain bearish unless the economy in the United Kingdom starts to show solid evidences of recovery, which haven’t been the case so far.
GBP/USD traded at 1.6372 as of 10:36 GMT from a intraday rate of 1.6494. EUR/GBP rose to 0.8728 from 0.8677.

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