UK Pound Loses Ground on Growing Risk Aversion
After seeing some increases earlier, the UK pound is back to losing ground as risk aversion rises. Concerns about global economic growth, and disappointments about earnings news from stocks, are weighing on the pound.
Earlier, the UK pound got a boost from a decline in business delinquencies. Also, there was a little more risk appetite, and that was supporting the pound as well.
Now, though, things have changed. Worries about the eurozone have returned as Spanish regions receive a downgrade and bond yields rise. Also, stocks are heading lower on disappointing earnings data.
UK pound generally does well when riskier assets are in favor. With stocks dropping, and concerns about the eurozone rising again, it is little surprise that the pound is losing ground. The only major that the pound is gaining against is the euro. With the latest news out of the eurozone, it is little surprise that the pound still has enough juice to gain against the 17-nation currency.
Even so, United Kingdom still has some economic struggles. The austerity measures haven’t worked as Prime Minister David Cameron would have like to reduce the deficit, and economic growth is sluggish without the government spending.
At 13:45 GMT GBP/USD is down to 1.5960 from the open at 1.6016. EUR/GBP is down to 0.8126 from the open at 0.8158. GBP/JPY is down to 127.4455 from the open at 128.0400.
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