Pound Sterling To Dollar Makes Gains As Global Appetite For Risk Picks Up

Modified: Tuesday, 21 February 2012 08:48 BST - Written by Tim Boyer

STORY LINK Pound Sterling To Dollar Makes Gains As Global Appetite For Risk Picks Up

The Pound to Euro exchange rate is 1.1962, while the Pound to US Dollar exchange rate is 1.5844.

Global oil prices hit their highest level since the start of last Summer during yesterday’s session as investors expressed their concerns over the escalating of tensions between Iran’s leaders and Western states over the country’s ongoing nuclear programme.

In spite of these fears, global stock markets registered healthy gains, with London’s FTSE 100 closing up by over 40 points on the day. The uptick in global appetite for risk was triggered as investors factored-in the likelihood that Greece will be allotted the next €130bn of bail-out funding which it needs in order to avoid a debt default next month.

Higher oil prices is bad news for the US economy, which is the largest net importer of crude in the world and a ‘risk-on’ trading environment caused by positive sounds from the eurozone added up to a poor day fro the US Dollar, which was outperformed by all of the other sixteen most-actively traded currencies during yesterday’s session. This saw the GBP USD exchange rate climb to 1.5880, its highest level since February 9th.

Elsewhere, yesterday proved to be a quiet session for Sterling, with little in the way of British data releases. However, this morning’s UK Public Sector Borrowing numbers could change all that; analysts expect the figures to show that Britain’s coalition government repaid £6.3bn of the UK’s national debt last month, following the heavy borrowing of recent months. Anything other than a sizeable repayment would bring the government’s spending cuts into question, bringing new selling pressure on the Pound.

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