Forex Reader

A few weeks ago, I had written a post titled “UK Terror Plot Affects Pound Sterling” about how pound was affected by the suspected terrorist activities in the UK. Now pound received another jolt. The British pound remained under pressure as six ministers of the UK government quit the Blair cabinet. Amidst the speculation and growing infighting within the governing Labour Party, the pound declined further.

According to the Sun tabloid, Prime Minister Tony Blair may quit his post by July 2007. This revelation has affected the British currency. Economists in the country are concerned over the developments, as they fear that decline of the pound may cause lasting damage to the country’s economy.

The British pound gained significantly after getting a boost from an encouraging retail sales survey from the Confederation of British Industry. The CBI gave further signs that the recent pick-up in high street sales in the UK would continue. The pound reached 1.8209 against the dollar on 28 June 2006, while the Euro dropped to 0.6903. The survey showed the balance of sales reading unchanged from previous level. It also suggests the steady recovery in consumer spending that has become evident after a shaky start.

According to Life Style Extra -

The Bank of England may also be more inclined to look at the 3-month trend, Maher said, though he noted that the survey ‘does not hint at any sudden resurgence in spending that might force a speedier rate hike from the central bank’.

The British pound has shown considerable gain against the Euro and Yen. However, it weakened against the US dollar. The British pound held the previous gains against the European currencies during New York trading Friday. Significantly, the Pound remained range-bound against the euro throughout the day. The pound rallied to a new high against the yen during New York trading Friday. It remained high against the yen for several hours. The pound traded at 213.15 against the yen on Friday. On the other hand, it reversed its gains against the dollar. Trading Markets Same Topic.

The pound lost ground against the dollar during morning New York trading. However, the British currency traded up in intraday trading amid remarks by Federal reserve officials. As of 3:15 pm ET, the pound was worth 1.8510 dollars.