Earlier in the trading session, the Pound Sterling had taken center stage among major currencies with a huge M&A deal giving the Pound a short term lift. Against the greenback, the Pound had struck a 3-week peak after Anheuser-Busch’s £68 billion proposal to SAB Miller was accepted. The boost for the Cable was fleeting at best and the pressure has resumed. Analysts point out that in the longer term, FX traders are still hedging their bets. The question is whether or not the Bank of England will embark on any tightening measures given the global growth situation, and especially as it pertains to the Eurozone.
As reported at 12:02 pm (BDT) in London, the GBP/USD was trading at $1.5238, a loss of 0.68%, slipping from a session peak of $1.5388. The EUR/GBP was trading at .7470 Pence, a gain of 0.90%; the pair’s trading band for the session was 0.7393 Pence at the low end and 0.7479 Pence at the high end.
Antipodean Currencies Pressured
Currency-linked currencies slipped after the release of disappointing trade data from China reaffirmed that domestic demand was declining. That is likely to increase the pressure on the government for more stimulus, either fiscal or monetary. Because Australia’s economy is tied so closely to China’s that put the Aussie Dollar under pressure, with the AUD/USD trading at $0.7304, down 0.78%. The New Zealand Dollar was also under pressure with the NZD/USD trading at $0.6703, a decline of 0.13%.