GBP/USD
British Pound Mixed Against Majors [GBP/USD]
4/7/2008 6:29:32 AM In early deals on Monday, the British pound showed mixed trading against its major counterparts. The sterling showed weakness against the dollar and the euro, but was higher versus the franc and the yen.
Against the greenback and the single currency, the pound hit 4-day lows today. Meanwhile, the sterling rose to 3-day highs against the franc and the yen.
This week, the focus of the currency markets will be on interest rates decisions by the Bank of Japan, European Central Bank and the Bank of England.
The ECB is still not expected to cut interest rates this week or any time soon given very high inflation levels. However, the matter is different in UK. Most analysts expect the BOE to cut its main rate by a quarter-percentage point to 5%.
In a review of the UK`s Chancellor Darling`s proposed budget for 2008, the Treasury Select Committee are of the view that budget`s projections for the growth of the British economy is too optimistic in light of uncertainty in global financial markets. Darling has previously lowered growth forecasts from an initial 2.5%-3% to a revised 1.75%-2.25%, which will increase the projected public borrowing to rise to £43 billion, up from the £36 billion necessary under the previous economic growth forecast.
The sterling showed weakness against the US currency in early deals today. The pound- dollar pair reached 1.9838 at about 3.20 am Eastern Time, moving down from Friday`s North American close of 1.9931. Currently, the pair is trading near1.9893.
Against the European currency, the British pound trended down today. The pound hit a 4-day low of 0.7913 at about 5.35 am Eastern Time, compared to last week`s close of 0.7898.
The French trade deficit stood at EUR2.8 billion in February, lower than EUR3.7 billion deficit expected, government data showed Monday. In January, trade deficit was EUR3.183 billion, revised from a 3.391 billion deficit initially reported.
Additionally, the Euro-zone Sentix investor confidence rose to 4.15 in April from 0.4 in March.
Meanwhile, German industrial production grew 0.4% month-on-month in February, following a revised growth of 1.4% in January, the Ministry of Economy and Technology indicated Monday. The initial growth estimate for January was 1.8%. Economists had expected industrial output to decline 0.4%.
Against the Swiss franc, the British currency advanced to a 3-day high of 2.0196 at about 4.45 am Eastern Time, compared to 2.0054 hit late New York Friday. The pound-franc pair is now worth 2.0139.
The State Secretariat for Economic Affairs, or SECO, reported today that Switzerland`s jobless rate dropped to 2.6% in March from 2.7% registered in February. The unemployment rate came in line with analysts` expectations. The number of unemployed people decreased 12% or 14,138 year-on-year to 103,777 in March.
The sterling that closed Friday`s deals at 202.40 against the Japanese unit hit a high of 204.28 at about 4.45 am Eastern Time. This sets a 3-day high for the sterling. Currently, the pound-yen pair is trading near 204.11.
The Japanese leading index increased sharply to 50 in February from 36.4 in January, a preliminary report from the Cabinet Office showed Monday.
The coincident index rose to 44.4 from 20 in the prior month and the lagging index remained unchanged at 50.
The Ministry of Finance said that the foreign exchange reserves in Japan increased by $7.61 billion in March to $1.016 trillion. The reserves had risen $11.94 billion in February from the previous month to $1.008 trillion, surpassing the $1 trillion plateau for the first time.
Tags: GBP/USD
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