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Thread: British Pound

  1. #21
    The pound fell to a one-month low against the euro after a report showed consumer-price inflation stayed above the Bank of England’s target at the same time as growth stagnates.

    The U.K. currency dropped versus 13 of its 16 major counterparts and Britain’s government bonds declined for the first time in four days. Amundi, which oversees $947 billion, said the pound will stay under pressure because inflation exceeds interest rates, damping returns on British assets. Lawmakers eased the Bank of England’s remit in March to give it greater flexibility to add stimulus even if inflation remains above its 2 percent target.
    “The fundamental outlook for the pound remains weak,” said Lee Hardman, a currency strategist at Bank of Tokyo Mitsubishi UFJ Ltd. in London. “The Bank of England is likely to further loosen monetary policy to support growth despite inflationary pressure. We see a rebound in sterling as an opportunity to establish a new short position.” A short position is a bet an asset will decline.


  2. #22
    The pound fell the most in six weeks against the dollar after government data showed the U.K. unemployment rate climbed and wage increases slowed, adding to signs the economy is weakening.

    Sterling dropped versus most of its 16 major counterparts as minutes of the Bank of England’s April meeting released today showed Governor Mervyn King pushed for additional stimulus for a third month before being outvoted. U.K. government bonds rose as investors sought safer assets. The International Monetary Fund cut its economic forecast for the U.K. yesterday and said the central bank should boost stimulus.
    “The outlook for the U.K. economy and the pound are actually quite bad,” said Arne Rasmussen, head of currency research at Danske Bank A/S (DANSKE) in Copenhagen. “The jobs data today is disappointing. That’s why investors should not underestimate the possibility the Bank of England will act aggressively to support growth even as it’s keeping the quantitative-easing target unchanged for now. The pound will fall much further.”


  3. #23
    The pound strengthened against the dollar, rising 0.2 percent to $1.5313 as of 7:39 a.m. London time. Sterling was little changed at 85.40 pence per euro.


  4. #24
    The pound dropped against the dollar, approaching the lowest level in two weeks, before a report that economists said will show Britain’s budget deficit narrowed in March from a year ago.

    Sterling was little changed versus the euro. The shortfall excluding temporary support for banks fell to 15.5 billion pounds ($23.7 billion) from 16.7 billion pounds a year ago, according to the median forecast of 23 analysts in a Bloomberg News survey. A report by the Confederation of British Industry is forecast to show business manufacturing orders fell at slower pace this month, according to a separate Bloomberg survey.
    The pound fell 0.2 percent to $1.5263 at 7:26 a.m. in London, after sliding to $1.5204 yesterday, the lowest since April 5. Sterling traded at 85.46 pence per euro.
    The pound has declined 3.7 percent this year, the second- worst performer after the yen among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar gained 3.3 percent and the euro rose 2 percent.


  5. #25
    The pound has raised British emotions ever since then Prime Minister Harold Wilson told voters that its value in their pocket hadn’t changed following a devaluation in 1967. Successive governments have taken steps to keep the U.K. out of the euro since the common currency was formed in 1999.

    The British government closed the door to a formal agreement with Scotland for its continued use of the pound if it votes to become independent next year, citing the tumult in the 17-nation euro region during the debt crisis.
    A study prepared by the Treasury in London said an official currency union between Scotland and the rest of the U.K. is unlikely to work well without political union.


  6. #26
    The pound rose against most of its major counterparts before a report forecast to show the U.K economy avoided a triple-dip recession.

    The pound gained for a fourth day against the euro, the longest streak this year, amid prospects the European Central Bank will cut borrowing costs as early as next week, while Bank of England policy makers remain split on the need for more stimulus through so-called quantitative easing. The yen halted losses against the dollar as a report showed Japanese investors were net sellers of foreign bonds for a sixth-straight week. New Zealand’s dollar surged for a second day.
    “The U.K.’s central bank is seen adding to monetary easing, but the fact that it hasn’t done so yet is spurring buying of the pound,” said Hideki Shibata, a senior rates and currencies strategist at Tokai Tokyo Research Center Co. in Tokyo. A positive growth figure from the U.K. will damp “expectations of additional easing.”


  7. #27
    The pound rose by the most since July against the dollar after a government report showed the U.K. economy grew more last quarter than analysts forecast, ensuring the nation avoided a triple-dip recession.

    Sterling advanced at least 0.4 percent against all 16 of its major counterparts as Chancellor of the Exchequer George Osborne said the data are an encouraging sign the economy is improving. The Bank of England next meets on May 8-9 after policy makers were split this month on the need to provide more monetary stimulus to spur growth. U.K. government bonds fell as demand for safer assets waned.
    “Sterling is trading higher and I would expect further gains,” said Neil Jones, head of European hedge fund sales at Mizuho Corporate Bank Ltd. in London. “The data puts another nail in the coffin for further money printing.”


  8. #28
    The pound strengthened for a second week against the dollar as economic reports that exceeded analyst estimates boosted confidence that growth is accelerating.

    Sterling climbed to an 11-week high versus the greenback as reports from U.K. business confidence to manufacturing, construction and services output beat forecasts. Benchmark 10- year gilts fell for a second week as demand for the safest assets waned and investors sought higher-yielding assets. The U.K. auctioned 50-year index-linked debt at a negative yield for the first time on April 30.
    “The data hasn’t been exactly good but the expectations have been so deflated that the hurdle for upside surprises is very low,” said Adam Cole, head of Group-of-10 currency strategy at Royal Bank of Canada in London. “We’re still positive on sterling.”


  9. #29
    The pound snapped a three-day decline against the dollar as an industry report showed a gauge of U.K. house prices climbed to the highest level in almost three years last month.

    Sterling was about 0.3 percent from a two-week low against the dollar. The Royal Institution of Chartered Surveyors said its home-price index rose to 1 from minus 2 in March, the first reading above zero since June 2010. The Bank of England will present its latest inflation forecasts tomorrow after refraining from expanding stimulus measures at its monthly policy meeting last week. The Debt Management Office is scheduled to sell 4.75 billion pounds ($7.28 billion) of five-year gilts today.
    The pound was little changed at $1.5317 as of 7:29 a.m. London time, after weakening 1.5 percent in the past three days. It dropped to $1.5278 yesterday, the lowest since April 25. Sterling was at 84.90 pence per euro.
    The pound has strengthened 1.9 percent in the past month, the third-best performer after the Canadian and U.S. dollars of 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The U.S. currency rose 2 percent and the euro gained 1.1 percent.
    The U.K. last sold five-year gilts on March 5 at an average yield of 1.041 percent. That’s down from 1.277 percent in February and compares with a record-low 0.787 percent set in November.


  10. #30
    The pound weakened for a fourth day against the dollar on speculation investors cut their holdings of the U.K. currency before the Bank of England presents its updated inflation forecasts tomorrow.

    Sterling dropped to a two-week low versus the euro even after an industry report showed a gauge of U.K. house prices climbed to the highest level since June 2010. The pound has slumped 2.4 percent against the dollar since strengthening to a three-month high of $1.5606 on May 1. Government bonds fell as the Debt Management Office sold 4.75 billion pounds ($7.25 billion) of five-year gilts.
    “Going into the inflation report tomorrow you’ve seen some people taking off some of the long cable positions,” said Peter Kinsella, a currency strategist at Commerzbank AG in London, referring to ending bets the pound will rise against the dollar. “People who are looking at price action would look at the failure to breach $1.56 over the past two weeks as being a sign that upside in cable from here is rather capped.”
    The pound dropped 0.3 percent to $1.5246 at 4:53 p.m. London time after declining to $1.5229, the lowest level since April 24. Sterling fell 0.3 percent to 85.05 pence per euro after depreciating to 85.17 pence, the least since April 25.


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