Rupee Makes Gains Against Pound, While Spanish Retail Banking Crisis Looms Holding Back The Euro

Modified: Friday, 25 May 2012 15:58 BST - Written by John Cameron

STORY LINK Rupee Makes Gains Against Pound, While Spanish Retail Banking Crisis Looms Holding Back The Euro

There was further cause for concern for the euro today, as shares in Spain’s fourth biggest bank, were suspended on the Spanish stock market. Fears are mounting for the eurozone’s retail banking sector, following reports in recent weeks of eight figure sums being withdrawn from Greek banks by account holders concerned that the Hellenic state may exit the single currency in the near-term. Things could get a lot worse next month, unfortunately.

Meanwhile, global equities markets saw a complete reversal from yesterday’s pattern. Today’s session saw North American stocks fare slightly ‘less badly’ than their European counterparts. This was largely due to a better-than-anticipated Michigan Confidence survey, released in the middle part of this afternoon’s session. The positive result for this key sentiment gauge saw the US Dollar struggle during this afternoon’s session.

Elsewhere, Sterling put in a steady performance, to trade within a tight range against the majority of the major currencies. Hometrack and Nationwide house price surveys at the start of next week could set the tone for the Pound. On recent form, these releases are highly unlikely to prove Sterling-positive.

The Indian Rupee has suffered a torrid time in the currency markets in recent weeks, with the GBP INR rate pushing to its highest level for several years, to register at above the 85 level. However, the risk-sensitive rupee has gained over 0.50% on the day today, suggesting that GBP INR may have been ‘overbought’. Another line of thinking would be that the all of the potential ‘bad news’ for the global economy is now out in the open, so the run against the INR has now bottomed out.

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