Pound Rises as UK Economy Looks Stronger Than EU Economy

The Great Britain pound gained today as the speculation that the economy of Britain will prove to be stronger that the economy of the European Union boosted the appeal of Britain’s currency.
Low demand for the Portuguese bonds will likely prevent Portugal from gathering enough profit for avoiding a bailout. Elsa Lignos, a currency strategist at Royal Bank of Canada’s RBC, said:

The inability to draw a line under the sovereign-debt issues undermines the euro and keeps a positive against sterling. In the U.K., while it does seem that there’s a long path ahead, at least we are moving in the right direction. At every step of the way you have fresh euro concerns.

According to the forecasts, the UK economy will grow 2 percent in 2011, while the EU economy will expand only 1.5 percent. The sterling strengthened even though the central bank expected to keep its main interest rate at the record low 0.5 percent.
GBP/USD traded near 1.5604 as of 23:21 GMT, rising from 1.5596. while GBP/JPY advanced from 129.82 to 130.14. EUR/GBP traded at 0.8314, near its opening level of 0.8315.

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