Pound Rises as Creation of European Stability Mechanism Delayed
The Great Britain pound climbed today as traders turned to the currency as a refuge from the European crisis. Worries about the crisis heightened on signs that the permanent bailout fund would be delayed, threatening the ability of the European Union to help its indebted members.
The creation of the European Stability Mechanism, a permanent fund that in time should replace the temporary European Financial Stability Facility, was ratified the German parliament, but the Constitutional court delayed its decision. After the 12-hour hearing, the court announced that the matter is too complicated and it may take months, not weeks as was previously expected, to reach a decision. Wolfgang Schaeuble, the Federal Minister of Finance, stated that the delay in creation of the ESM “could lead to a significant worsening of the current crisis” and result in ”broader uncertainty in markets far beyond Germany and a huge loss of confidence in the euro area”.
GBP/USD rose from 1.5515 to 1.5557 as of 12:15 GMT today. EUR/GBP fell from 0.7895 to 0.7880, reaching the low of 0.7844 intraday — the lowest rate since October 31, 2008.
If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.
Earlier News About the Great Britain Pound:
- Pound Gains vs. Euro on Manufacturing Data, Falls vs. Dollar (2012-07-10)
- UK Pound Mixed as Forex Traders Look for Direction (2012-07-09)
- Bank of England Expands Asset Purchase Program (2012-07-05)
- UK Pound Struggles ahead of BOE (2012-07-04)
- UK Pound Down Against Dollar, But Higher Against Euro (2012-07-02)