British Pound Sterling | Currency News Views and Outlook
British Pound Sterling: Currency loses ground vs riskier EUR, ekes out gains vs USD - market sentiment remains volatile however
- Category: British Pound Sterling
- Published on Friday, 22 June 2012 14:03
- Written by Will Peters
The European Central Bank has relaxed the rules over collateral it will accept for central-bank loans in a bid to ease strains on commercial banks in Spain.
The Pound sterling (Currency:GBP) weakened against the U.S Dollar over-night, falling as low as 1.5580, after achieving a high of 1.5750 earlier this week.
However at 14:50 in London we see the pound US dollar exchange rate had moved 0.01 pct into the blue to 1.5593.
Pound euro exchange rate is 0.21 pct in the red at 1.2408. (Please see the latest pound euro forecasts at our IMT site, access via this Facebook gateway is Free).
The pound Australian dollar exchange rate is 0.13 pct lower at 1.5523.
Interesting breaking news: "Now Greece's new finance minister has collapsed. Reuters reports "Greek incoming finance minister Rapanos taken to hospital after fainting spell - govt sources". Twitter is alive with speculation as to what prompted his faint," reports the Guardian.
The European Central Bank has relaxed the rules over collateral it will accept for central-bank loans in a bid to ease strains on commercial banks in Spain and the rest of Southern Europe.
It has made more types of securities eligible as collateral at its lending facilities, including bundles of car loans and residential mortgage-backed securities, and reduced their ratings thresholds.
Risk sentiment has been volatile today, but as trading in the US moves into the day we are seeing a gradually improvement
Earlier, risk sentiment dipped, "as Moody’s Investors Service cut the credit ratings of the UK’s four biggest lenders. UK banking shares plummeted this morning, led by declines at Royal Bank of Scotland Group Plc and Barclays Plc, while HSBC Holdings Plc along with Lloyds Banking Group Plc was lowered one grade instead of two," notes Adam Solomon at TorFX.
The FTSE 350 Banks Index was down 0.4%, while shares in RBS fell 0.8% and Barclays 0.5%.
Although the credit rating downgrades had been expected for some time now, the scale of the credit rating cuts were excessive and renewed concerns over the UK banking sector.
"The Pound remained stubbornly above 1.24 against the Euro, as European stocks also plunged following a report that German business confidence declined to its lowest level in more than two years," notes Solomon.