UK pound is being helped on two fronts today. General risk appetite, with the focus on the Facebook IPO, is helping the sterling against the US dollar. On the other hand, pound is higher against the euro, as concerns about what’s happening in the eurozone make the pound a preferred choice as a European safe haven currency.
Right now, pound is gaining against the US dollar as some disappointing news (including the unemployment claims data released this week) provides a foundation for risk appetite. Also providing a foundation for risk appetite is the Facebook IPO. Equities are responding well to the excitement of one of the biggest IPOs of all time, and that is helping the pound.
Against the euro, pound is gaining in large part because it’s not the euro. With Moody’s unleashing downgrades in Spain, and concerns about Greece still dominating eurozone news, it is little surprise that Forex traders favor the pound over the 17-nation currency. Pound is being treated like a European safe haven. Even though there are stil problems in Britain, and the Bank of England hasn’t taken quantitative easing off the table, many feel that the sterling offers a better value than the euro.
At 13:38 GMT GBP/USD is up to 1.5825 from the open at 1.5797. EUR/GBP is down to 0.8032 from the open at 0.8038.
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