Piagi reports as the GBP rises verses the Euro & Dollar
Posted by Piagis Shoutout on Tue, Jan 31, 2012 @ 08:45 AM
Forex rates page 31.jan 2012
Today the last day of January we report as the Great British Pound strengthened to a 10-week high against the US Dollar as the optimism European leaders are seen to be moving closer toward resolving the region’s debt crisis damped demand for the relative safety of the greenback.
The Gilts fell for the first time in five days after the Greek Prime Minister Lucas Papademos said progress had been made in debt-swap talks with the nation’s bondholders. European lenders may next month ask the European Central Bank for twice the amount of loans they took in December’s refinancing operation, the Financial Times reported. Sterling also rose against the Japanese yen after industry data showed U.K. consumer confidence increased to a seven-month high in January.
“Sterling is being driven by a broader uptick in risk sentiment,” said Elizabeth Gregory, a market strategist at Swissquote Bank SA in Geneva. “A lot of people are encouraged that European financial operations are going to handle all of their imminent funding needs.”
The Great British Pound gained 0.4 percent to $1.5777 at 2:06 p.m. London time after climbing to $1.5796, the strongest level since Nov. 21. It headed for a 1.5 percent monthly advance. Sterling rose 0.4 percent to 120.37 yen, and appreciated 0.2 percent to 83.50 pence per euro.
European chiefs meeting in Brussels yesterday agreed to accelerate the introduction of a permanent 500 billion-euro ($660 billion) rescue fund and signed a deficit-control treaty. Papademos said he’s “strongly committed” to reaching a debt- swap agreement with Greece’s creditors.
The FTSE 100 Index of shares gained 0.8 percent and the Stoxx Europe 600 index rose 1 percent.
ECB Lending
The ECB lent European financial institutions a record 489 billion euros in three-year loans on Dec. 21 as part of its measures to encourage banks to maintain lending. Some banks may double or triple their requests at the next operation, the FT said, citing three unnamed chief executive officers.
The U.K. currency snapped yesterday’s decline against the dollar after GfK NOP Ltd. said its gauge of U.K. consumer sentiment climbed four points from December to minus 29, the highest reading since June. Consumers’ outlook for the economy and their personal finances also improved.
Mortgage approvals rose less than economists forecast in December and consumer credit fell the most on record, a separate report from the Bank of England showed.
The pound has weakened 1 percent this year according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. The dollar dropped 2.5 percent, and the euro weakened 0.8 percent.
Gilts Drop
The yield on the 10-year gilt climbed two basis points, or 0.02 percentage point, to 2 percent after dropping to a record 1.917 percent on Jan. 18. The 3.75 percent bond due September 2021 fell 0.115, or 1.15 pounds per 1,000-pound face amount, to 115.20.
Overseas investors cut their gilt holdings by the most since March 2009 last month, according to the Bank of England. Investors sold a net 10.66 billion pounds of U.K. government debt, compared with net purchases of 16.3 billion pounds in November, data published on the central bank’s website showed.
Gilts have handed investors a 0.1 percent return this year, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. Treasuries gained 0.2 percent.
Since the Bank of England expanded its debt purchase program on Oct. 6, gilts have returned 0.5 percent after volatility was taken into account, according to Bloomberg risk- adjusted return rankings.
The risk-adjusted return is calculated by dividing total return by volatility, or the degree of daily price-swing variation, giving a measure of income per unit of risk. The returns are not annualized.
The U.K. plans to auction as much as 7.25 billion pounds of bonds and bills this week.
