UK pound is paring earlier losses against the US dollar right now, thanks to positive data in the United States, and a return to some level of risk appetite. Manufacturing improved more than expected, and US stocks are gaining right now, lending support to the sterling.
While UK pound is still down on the day, better news in the United States is helping the sterling regain some of its strength. Earlier, a lot of the focus was on the eurozone data that indicates that the 17-nation currency region might be headed for recession — or that it is already in a recession. This news sparked risk aversion and sent high beta currencies lower.
Sterling is getting some help now, though, with a cautious return to risk appetite. UK pound is off today’s earlier lows against the greenback, with the support of higher equities. Against the euro, the pound retains the upper hand, gaining as the situation in the eurozone continues to disappoint many. With talk of recession, and with concerns about sovereign debt still uppermost, it is little surprise that the pound is stronger against the euro.
At 16:19 GMT GBP/USD has almost caught up on the day, at 1.6024, just barely below the open at 1.6025. EUR/GBP is still lower at 0.8316, down from the open at 0.8338.
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