Pounds to Euros Exchange Rate Today ? GBP USD Spirals As Share Markets Gain and Global Appetite For Risk Returns

Modified: Thursday, 2 February 2012 08:25 BST - Written by James Fuller

STORY LINK Pounds to Euros Exchange Rate Today ? GBP USD Spirals As Share Markets Gain and Global Appetite For Risk Returns

The Pound Euro exchange rate (GBP EUR) is 1.2039. The Pound Dollar exchange rate (GBP USD) is 1.5828. The Pound Australian Dollar exchange rate (GBP AUD) is 1.4774.

Yesterday’s session saw the return of global appetite for risk, taking equities markets higher and causing institutional investors to shift out of safe-haven assets.

The ‘risk-on’ trading environment was sparked partly by encouraging data releases and partly by developments in European bond markets.

British Manufacturing data provided the first piece of positive news, with the release of January’s PMI Manufacturing survey in the UK yesterday morning, which printed at 52.1 – significantly higher than analysts had been expecting. The number provided evidence of a return to growth for the UK’s manufacturing sector, following December’s counterpart figure of 49.7.

The ISM Manufacturing survey for last month, released yesterday afternoon in the States, was similarly encouraging, showing at 54.1 versus 53.1 in December.

Meanwhile, there was further good news from European bond markets, with both German and Portuguese auctions having strong uptakes. Both countries managed to move their allotted allocation of gilts at narrower margins than in recent times. This was particularly significant for Portugal, following the dramatic widening of the yields on Portuguse gilts of last week.

Decreased risk aversion hit the US Dollar harder than most, causing the Greenback to be the worst-performing currency on the day, as investors steeled themselves and moved their funds out of US t-bills and into riskier, higher-yielding assets. This saw the GBP USD spiral to touch 1.5883 towards the end of yesterday afternoon's European session , its highest level since 18th November. Conversely, the GBP AUD and GBP NZD rates tumbled to overnight lows of 1.4740 and 1.8969 respectively. Further downside for the Australasian pairs is possible during today’s session if appetite for risk remains buoyant.


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