The Great Britain pound weakened this week against the US dollar and the euro, but losses were limited because of favorable fundamentals. The currency was also falling versus the Japanese yen, but managed to rebound by the weekend.
The pound was soft ahead of the Bank of England policy meeting on speculations that stimulus will remain in place. Yet the currency surged after the gathering even though the central bank indeed kept monetary accommodation. Fundamentals were also supportive for the sterling.
The dollar was rising on speculations that the Federal Reserve will scale back quantitative easing even after the Fed itself said that QE will stay for a long time. Yet worse-than-expected non-farm payrolls made the US currency slump. It did not erase the weekly gain versus the pound, but significantly reduced it.
The euro was also rising ahead of the European Central Bank meeting as fundamentals gave hope for economic recovery. The ECB left its policy unchanged too, but such decision had radically different effect on the euro compared to the impact of the BoE announcement on the sterling as the European shared currency slumped.
GBP/USD dropped from 1.5378 to close at 1.5285, but rebounded from the weekly low of 1.5101. EUR/GBP went up from 0.8635 to as high as 0.8768 (the highest level since March 12), but retreated to 0.8688 by the weekend. GBP/JPY closed at 151.09 this week after falling from 150.82 to 148.23.
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