The pound rose against the single currency yesterday, as gains in share prices and news that British bank Barclays may sell a fund management unit to boost its capital base improved appetite for the pound. Shares in Barclays rose 22% following the announcement, and news that the bank had a ‘strong start to 2009’ created some confidence in markets and investors duly bought into perceived higher risk currencies such as the pound.
The Bank of England also held its second auction yesterday as part of its quantitative easing policy to boost money supply in the economy. The central bank bought just under £2bn worth of long dated gilts in its auction. Investors will take particular note of the economic confidence survey released by ZEW in Germany this morning, and the direction that equity markets take.
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