UK Pound Gains on Economic Forecast

UK pound is gaining against the US dollar and the Japanese yen today as an economic forecast expects growth to pick up in 2012. The Confederation of British Industry believes that Great Britain will avoid a technical recession this year, and that things will pick up. As a result, UK pound is heading higher against low beta currencies.

Also helping the pound in Forex trading is the general risk appetite today. Equities in Europe and the United States are higher, and that is providing some support to the pound. The news that Greek parliament has agreed to accept tougher austerity measures from the Eurogroup is providing risk appetite to the market in general.
UK pound is still struggling against the euro, though. Euro is a bit higher against the pound on the good news about Greece. However, there are still concerns about the euro — and the future of the eurozone. Greece still have plenty of hurdles to jump, and there is still debt to be dealt with in other southern European countries like Italy and Portugal.
As a result, the euro has been unable to rally solidly against the UK pound. If the euro continues to struggle, and Britain’s outlook improves, it is likely that sterling could gain the upper hand.
At 15:52 GMT GBP/USD is higher at 1.5784, up from the open at 1.5778. GBP/JPY has slipped from its previous gains to fall to 122.3240, down from the open at 122.3950. EUR/GBP is up to 0.8374 from the open at 0.8371.

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