Wednesday, 6 May 2009

Sterling begins giving back its gains

After making strong gains against the euro yesterday and climbing to a 2-week high this morning, the pound has now begun weakening as investors buy into the US dollar as they brace for the results of the stress tests on US banks due tomorrow.

Concerns about the stress tests were heightened after a source familiar with the tests said Bank of America required as much as $34 billion in extra capital. Markets are also cautious ahead of tomorrow’s policy decisions from the European Central Bank and the Bank of England, in addition to US non-farm payrolls data due on Friday.

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