Foreign Exchange: Pound Rises Against Euro
Published: 13 April 2012 By Julian Stone Leave a Comment
The Pound rose against the Euro yesterday, rising to a high of 1.2150, despite reports that the UK trade deficit widened by the most in three months in February.
The UK trade deficit, the gap in goods and services extended to £8.77 billion, from a revised £7.88 billion in January and fuels concerns that the UK economic recovery will be limited due to a fundamental lack of demand from the European market and elsewhere for UK exports.
But it is a strong showing in exports that the government is banking on to help sustain the UK recovery, as manufacturers and consumers struggle to cope with rising unemployment and inflation.
The UK currency traded on the foreign exchange market at its highest level in three months against the Euro – Italian borrowing costs increased at a debt sale which helped the appeal of UK assets as a haven from the European sovereign debt crisis.
The Pound also remained above 1.59 against the US Dollar. It did though slip a little overnight following the Rightmove house price data and a wider US recovery.
The Euro bounced back against the Pound last night, as the UK currency encountered strong resistance in the region of 1.2150. It also remained pretty resilient against the US Dollar, as global risk appetite continued to improve through the course of the day, reducing demand for the US currency as a safe haven.
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