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Will the Great Britain Pound Strengthen Further?

April 13, 2012 at 14:30 by Miranda Marquit

Focus on digits on UK pound notesGreat Britain pound is showing weakness against the US dollar right now, but it is higher against the euro — and many think that the pound is likely to continue making gains against the the 17-nation currency in the near future.

Sterling is struggling against the US dollar, along with other high beta currencies today. Risk appetite is hard to come by with the latest news out of China encouraging concerns about the global economic recovery. However, even though the pound is down against the greenback, it is gaining against the euro.

Part of the risk aversion in the markets is that focus is once again including Spain, and what could be next for the embattle country. Bond yields have risen again, and talk of sovereign debt contagion is pressuring the euro. As a result, the UK pound is looking like an attractive alternative to the 17-nation currency, and some expect pound strength to continue against the euro.

Of course, the pound could find itself weaker if the Bank of England takes a hand in efforts to weaken the sterling. The pound has been higher against a basket of currencies important to British trade, and the BOE might decide that a little policy shift could help keep the sterling a little weaker — and give the edge to Britain in trade.

At 14:28 GMT EUR/GBP is down to 0.8239 from the open at 0.8263. GBP/USD is lower at 1.5885, down from the open at 1.5960.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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