Property

Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

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Currencies

Euro suffers worst month against the pound since financial crisis

Political risks are still all the rage in the currency markets. The euro has suffered its worst slump against the pound since 2009 in November, as investors hone in on a series of looming battles between eurosceptic populists and establishment parties at the ballot box. The single currency has shed 4.5 per cent against sterling […]

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Banks

RBS falls 2% after failing BoE stress test

Royal Bank of Scotland shares have slipped 2 per cent in early trading this morning, after the state-controlled lender emerged as the biggest loser in the Bank of England’s latest round of annual stress tests. The lender has now given regulators a plan to bulk up its capital levels by cutting costs and selling assets, […]

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Currencies

China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

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Banks

Carney: UK is ‘investment banker for Europe’

The governor of the Bank of England has repeated his calls for a “smooth and orderly” UK exit from the EU, saying that a transition out of the bloc will happen, it was just a case of “when and how”. Responding to the BoE’s latest bank stress tests, where lenders overall emerged with more resilient […]

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Categorized | Currencies

Haven status lifts pound to annual high


Posted on April 30, 2012

The pound hit a fresh annual high against the euro and the dollar, rising above $1.63 for the first time since August as the UK currency benefited from haven demand in Europe.

Sterling rose above €1.23 against the single currency, gaining 0.1 per cent to reach an annual high of €1.2311, its strongest level against the euro since June 2010.

    The pound’s strength surprised markets last week, as the demand for a relative haven in Europe outweighed figures showing the UK had slid back into recession after the first quarter.

    Sterling rose to annual highs against the single currency on three out of five trading days last week. Speculators moved to net long sterling positions last week for the first time since August, data from the US Commodity Futures Trading Commission showed.

    “With tensions in the euro-area unrelenting, it seems fair to conclude that the recent pattern in trade for euro/sterling is unlikely to change,” said Neil Mellor, foreign exchange analyst at BNY Mellon.

    But the pound pared gains later in the session to fall 0.2 per cent against the euro to €1.2264 and 0.3 per cent against the dollar to $1.6227, as the US currency clawed back its losses against other leading currencies.

    The euro fell 0.1 per cent to $1.3220 while the Australian, New Zealand and Canadian dollars and the Swiss franc dipped against the US dollar as risk appetite waned after Standard & Poor’s, the rating agency, downgraded a string of Spanish banks.

    The Australian dollar weakened ahead of a decision by the Reserve Bank of Australia on Tuesday on whether to cut interest rates, with market participants expecting a cut of at least 25 basis points to 4 per cent.

    The Aussie dipped 0.4 per cent to $1.0412. The currency had reached a one-month high against the dollar last week, after gaining strength as markets decided the prospect of a rate cut had been fully priced in.

    “A decision to ease by just 25 basis points could see some further relief gains in the currency,” noted analysts at Credit Suisse.