Pounds Ends Another Week Down on Crisis

The pound has been one of the most affected currencies by the credit crunch last year and during the past three weeks it suffered another substantial decline as the U.K. economic scenario continues to deteriorate and this Friday risk aversion is high again pushing investors towards safety.

Today the British currency found obstacles to climb in both domestic and international economy scenarios, as risk aversion rose globally. Nationwide Building Society indicated today a worse than previous forecast for house prices increase in the U.K., raising concerns on the real estate market which was one of the most impacted by the global slump last year, especially in England. Equities markets in the U.K. and overseas also had a negative day before a G-7 meeting which may approach sensitive topics regarding the economic future in the world’s wealthiest nations, forcing investors to opt for safer assets and damping demand even further for the U.K. pound.

The situation in the U.K. and the current problematic market sentiment make of the British pound one of the worse bets available in foreign-exchange markets, as Bank of England’s inefficiency to cope with financial problems in the country becomes more evident by the day, damping demand for the British currency which is likely to remain unattractive for a while.

GBP/USD traded at 1.5851 as of 10:49 GMT from a previous rate of 1.5966. EUR/GBP traded at 0.9173 from 0.9109.

If you want to comment on the Great Britain pound’s recent action or have any questions regarding this currency, please, feel free to reply below.

Dollar Climbs on Economic Forecasts

The dollar kept its previous days trend gaining versus the euro and high-yielding currencies as forecasts suggest that loan defaults and unemployment rates will keep deteriorating, raising risk aversion and adding attractiveness for the safe profile of the greenback.

An expected rise in unemployment figures, and a still very complicated credit situation in the United States rose concerns among traders regarding the economic recovery in North America and consequently in a global dimension, slashing earlier gains this week for higher-yielding currencies and favoring currencies with a relative safe profile, as the U.S. dollar and the yen. The dollar is likely to end today’s session setting a second week of gains versus the euro, as the current strength of the Eurozone currency is already raising policy makers concerns, as it decreases competitiveness for European products and could slow down the economic rebound in the region.

A negative day in stocks and commodities while market sentiment impacted by U.S. employment figures and the Group of 7 meeting which may approach sensitive topics are providing support for the dollar tor remain strong in the short-term at least. If concerns regarding a strong euro be confirmed in the G-7 meeting, the dollar may extend gains versus the euro during the next week.

EUR/USD traded at 1.4543 as of 9:47 GMT from a previous rate of 1.4565 yesterday. USD/CAD traded at 1.0894 from 1.0747.

If you want to comment on the U.S. dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.