Monday, 5 September 2011

Pound Profits from Terrible US Payrolls

Britain won the pound against the U.S. dollar as poor U.S. Nonfarm payrolls reduces the attractiveness of the dollar. The pound also rose against the euro as traders are concerned about the European economy.

Forex traders that the owner of Euro want to find a safe haven in Europe's economy shows signs of slowing. The yen and the franc, the currencies being conventional insurance, are the logical choice, but under the threat of intervention. The dollar was feeling the pressure of all the potential third of the quantitative easing for some time and now, after the very unfavorable payrolls were released, intensifying the pressure. No wonder, considering all factors, some traders look at the new pounds of protection.

The problem with thinking about the British pound as the protection of Europe's problem is that Britain has its share of problems. The index of home prices nationwide fell 0.6 percent in August. The manufacturing Purchasing Managers' Index fell from 49.4 to 49.0 in August, the lowest reading in 26 months, while construction PMI fell to 52.6 in August from 53.5 in July.

GBP/USD closed at 1.6215 after jumping during the trading session from 1.6177 to 1.6253. EUR/GBP sank from 0.8812 to 0.8746 before closing at 0.8761.

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