The pound fell compared to the euro and increased compared to the dollar on Friday, reflecting a sale of American assets, the traders taking refuge in safe currencies in a context of climbing world trade war, while the British GDP figures, better than expected, have hardly changed things.
At 1004 GMT, the book was up 1% compared to the dollar at $ 1,30,950, and down 0.5% compared to the euro to 0.8675.
Massive sales of dollars have plunged the greenback compared to a series of currencies, while the confidence of investors in the greatest economy in the world is decreasing.
The shelters such as the Swiss franc and the euro have been in the meantime at their highest level for several years, the traders getting rid of American active workers.
“The pound sterling is more sensitive to the feeling of risk than the euro … and it is less liquid than the euro; in general, it is logical under these conditions than the euro/the pound sterling rises. Regarding the cable, it is just a story of dollar,” said FranceSco Pesole, FX strategist at ING.
-Earlier in Friday, official figures showed that the British economy had returned to growth in February, with its fastest expansion for 11 months, exceeding economists’ expectations.
The book has practically not moved following this news, the attention remaining concentrated on developments linked to customs tariffs, China having imposed additional customs tariffs in the United States on Friday morning as part of a new escalation of the trade war.
The Gilts market is an additional factor that weighs on the Sterling book, said Pesole.
“At a time when bond market instability leads to outings of the US dollar in the United States, the markets are interested in instability of the bond market in the United Kingdom,” he said.
Gilts yields at the age of thirty dived 16.8 basic points on Thursday – their strongest daily decrease in more than two years – but resumed the increase observed on Friday since Trump’s customs tariffs shaken the markets.
