The pound is higher against its major rivals as investors support UK’s detachment from Eurozone debt crisis. Moody’s Investor Service and Standard & Poor’s reaffirmed recently Britain’s AAA rating, while warning Germany and France that their golden rating is in jeopardy as European leaders struggle to solve the sovereign debt crisis. The British government has pledged to maintain the most austere economic policies since World War II. On the other hand, Bank of England has started a second round of quantitative easing to stimulate the economic recovery. Expect for the pound to remain driven by market risk aversion as there are no major economic releases or public speeches scheduled for today.
The dollar consolidated during the Asian session on signs the world’s largest economy is gaining momentum, damping demand for safer assets. The economists are projecting for the US economy to expand above 2.0% next year after growing 1.8% this year. At their December meeting Fed’s policy makers said “the economy has been expanding moderately” and expect to pick up slightly in 2012. Looking ahead to today, US consumer price index headline the economic calendar, with the expectations for the figures to have increased by 0.1% last month after falling -0.1% in October.
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