Sterling on rise after London bombings

Story link: Sterling on rise after London bombings

Sterling seemed to be rising above the repercussions of the London bombings of last week, as it gained 0.7 percent to ¥196.29 in relation to the yen and was up 0.4 percent against the euro to £0.6863.

In these advances, sterling overcame some slightly negative data on core producer prices, which did not move in June, as well as a UK goods trade deficit of £5 billion in May.

Experts had expected a deficit of only £4.8 billion. The euro gained 0.4 percent in relation to the yen, to ¥134.81, as it was helped by the much reduced possibility that eurozone interest rates will be cut anytime soon. Luxembourg’s approval of the European Union Constitution over the weekend benefited the euro as well.

Meanwhile, the US dollar fell in relation to the euro, the yen, sterling, and the South African rand. The dollar fell 0.8 percent to $1.20068 in relation to the euro, was down 0.4 percent against the yen to ¥111.75, lost 1.2 percent to $1.7571 in relation to sterling, and declined 1.5 percent in relation to the South African rand to R6.735.

Analysts said that the weakness in the dollar had to do with the liquidation of some long-dollar positions by short-term speculators and a continuing trend of certain Asian central banks to purchase euros.