Pound Advances but Loses Ground to Euro

The Great Britain pound advanced today as speculations that Italian Prime Minister Mario Monti may leave his office led to increasing demand for the currency as a refuge. Surprisingly enough, the euro managed to outperform the sterling even after the negative news from Europe.
Monti is ready to resign after approval of the budget for the next year. He may exit the office as soon as February. Monti decided to resign after previous Prime Minister Silvio Berlusconi increased his attacks on Monti and said that he is going to run for the seat during the next election.
The sterling was losing its appeal as a haven from Europe’s crisis. Now, demand for the safety returns as Europe scared investors yet again. Nevertheless, the euro puzzled analysts as the currency remains strong even in the face of all the bad events in the eurozone.
GBP/USD rose from 1.6034 to 1.6071 as of 20:47 GMT today. GBP/JPY was near 132.36 after falling from 132.30 to 131.64. At the same time, EUR/GBP edged higher from 0.8035 to 0.8048, rising from the low of 0.8033 — the weakest since November 21.

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