Wednesday, 28 October 2009

Barclays Bank

The European currency soared to a 7 month high versus the USD yesterday, as optimistic global manufacturing data from the Euro-Zone, U.S., Britain and China led to a decline in demand for the safe-haven USD. In addition, the British Pound jumped against the Dollar, as the British economy showed really clear signs that it may rise out of recession by the end of the 3rd quarter. This was following the publication of very positive British manufacturing data, and the much better than expected pre-tax profits of HSBC and Barclays Bank.

The GBP/USD pair rose by over 250 pips in Monday's trading to the 1.6980 level. This may also have been helped as the USD may have come under increasing pressure from the rise in Oil and other commodity prices. The EUR/USD cross climbed by 190 pips to 1.4421, the highest level since December 2008, just weeks after the collapse of Lehman Brothers. Both the EUR and GBP rose against a string of other currencies, such as the JPY, as demand for higher yielding assets rose, along with risk appetite, as yesterday's trading dragged on.

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