UK pound is mixed today, gaining against the US dollar, but pulling back against the euro. Risk appetite is making a cautious appearance in the currency markets, even with trouble in the eurozone. Indeed, pound’s fall against the euro is a bit of a surprise after the British currency’s recent gains.
Earlier, the UK pound logged gains against the euro, as Fitch warned again that AAA countries in the eurozone could be facing a downgrade. With concerns about Italian borrowing costs (which are on the rise), and trepidation over the upcoming Greek elections, some had expected the euro to remain lower a little bit longer. However, the pound can’t seem to maintain its gains against the euro. Against the US dollar, though, sterling is seeing some solid gains on a modest amount of risk appetite.
Questions about the UK economy are being asked as well, though. Britain has been unable to kickstart its economy through a combination of austerity and quantitative easing. The program hasn’t been expanded recently, but members of the Bank of England have been walking a fine line between keeping a lid on inflation and trying to stimulate the economy. More confusion about the pound is likely to result in the future.
At 13:50 GMT EUR/GBP is up to 0.8102 from the open at 0.8098. GBP/USD is up to 1.5534 from the open at 1.5505.
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