Mixed Week for Pound, Good from Fundamental Point of View
The Great Britain pound had a mixed week after positive macroeconomic fundamentals reduced need for stimulating measures, but the minutes of the central bank’s policy meeting showed that some policy makers think that the UK economy needs even more stimulus.
Most economic reports were positive for the pound. Among them were larger-than-forecast budget surplus, increasing mortgage approvals and growing gross domestic product. Skepticism about ability of the European Union to resolve its debt problems allowed the sterling to retain its appeal as a safe haven from the European crisis, though the attractiveness was diminished after Greece received its bailout. The minutes of the Bank of England monetary policy meeting were the major downside factor for the UK currency, indicating that additional quantitative easing is possible.
The pound was down against the dollar in the first half of the week, but erased its losses in the second half. The UK currency drifted sideways versus the yen, but jumped to the highest level this year on Friday. As for the euro, the pound also rose against the currency on Friday, but that wasn’t enough to erase the losses of the four previous sessions.
GBP/USD climbed from 1.5836 to 1.5876 after falling to the weekly low of 1.5647. GBP/JPY jumped from 126.02 to 128.90 (that’s almost equal to the jump the currency pair made on Friday), while weekly high of 128.95 was the highest price since August 5. EUR/GBP was up from 0.8314 to 0.8468 this week and reached the high of 0.8505 last seen on December 12.
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Earlier News About the Great Britain Pound:
- Pound Climbs with Annual GDP Growth (2012-02-24)
- Pound Climbs as Mortgage Approvals Reach Two-Year Record (2012-02-24)
- Pound Slips as Minutes Show Probability of Quantitative Easing (2012-02-22)
- UK Pound Struggles, Even with Budget Surplus in Britain (2012-02-21)
- Sterling Benefits from Rising Retail Sales (2012-02-17)