The pound fell for a second day against the euro as U.K. banking stocks declined earlier amid concern that the economic recovery may stall.The British currency was little changed against the dollar as the FTSE 350 Banks Index fell as much as 0.4 percent, before erasing its declines. A report this week may show U.K. house price growth slowed last month, according to a Bloomberg survey of economists. Futures traders increased bets that the pound will decline against the U.S. currency, the latest figures from the ashington-based Commodity Futures Trading Commission show.“There seems to be a growing belief that stocks have rallied too far given the outlook for earnings, and sterling does correlate well with stock markets,” said Neil Jones, head of European hedge-fund sales in London at Mizuho Corporate Bank Ltd. “The economic recovery is still fragile.”
Sterling weakened by 0.3 percent to 91.67 pence per euro as of 3:13 p.m. in London. It traded at $1.5939, from $1.5946. The pound bought 142.93 Japanese yen, from 143.21.
Sterling weakened by 0.3 percent to 91.67 pence per euro as of 3:13 p.m. in London. It traded at $1.5939, from $1.5946. The pound bought 142.93 Japanese yen, from 143.21.
Government bonds gained, with the yield on the 10-year gilt dropping 3 basis points to 3.41 percent. The 4.5 percent security due March 2019 rose 0.26, or 2.6 pounds per 1,000- pound ($1,594) face amount, to 108.74. The two-year note yield declined less than 1 basis point to 0.75 percent. The U.K. banks’ index dropped 0.3 percent, pushing its loss since Sept. 29 to 5.6 percent. It has more than doubled in value since reaching its lowest level this year on March 9.
‘Too Soon, too Fast’
Markets “have gone up too much, too soon, too fast,” New York University Professor Nouriel Roubini, who predicted the financial crisis, said in an interview in Istanbul on Oct. 3.
‘Too Soon, too Fast’
Markets “have gone up too much, too soon, too fast,” New York University Professor Nouriel Roubini, who predicted the financial crisis, said in an interview in Istanbul on Oct. 3.
“I see the risk of a correction, especially when the markets now realize that the recovery is not rapid and V-shaped, but more like U- shaped.” The difference in the number of wagers by hedge funds and other large speculators on a decline in the pound compared with those on a gain, so-called net shorts, was 47,826 on Sep. 29, compared with net shorts of 31,595 a week earlier, CFTC data showed.
Losses by the pound may be limited as reports signal the economy is emerging from the recession after the Bank of England cut the benchmark interest rate to a record low and started buying government bonds to further depress borrowing costs.
Services Resilience
An index of services industries, based on a survey of 700 companies, increased to a two-year high in September of 55.3, from 54.1 a month before, Markit Economics said today. The median forecast in a Bloomberg survey of 28 economists was for a gain to 54.5. Financial firms see signs of recovery and banks report feeling “more confident” for the first time since the economic crisis began, according to a survey by the Confederation of British Industry and consulting firm Pricewaterhouse Coopers LLP.
In the U.S., the Institute for Supply Management’s index of non-manufacturing businesses, which make up almost 90 percent of the economy, rose to 50.9 in September, higher than forecast,the first expansion in a year, according to the Tempe, Arizona- based group. Fifty is the dividing line between expansion and contraction.
“The resilience of the services sector is buoying up sentiment and helping the pound,” said Jeremy Stretch, a senior currency strategist at Rabobank International in London. “There is some cautious optimism.”
(source: Bloomberg news)
Losses by the pound may be limited as reports signal the economy is emerging from the recession after the Bank of England cut the benchmark interest rate to a record low and started buying government bonds to further depress borrowing costs.
Services Resilience
An index of services industries, based on a survey of 700 companies, increased to a two-year high in September of 55.3, from 54.1 a month before, Markit Economics said today. The median forecast in a Bloomberg survey of 28 economists was for a gain to 54.5. Financial firms see signs of recovery and banks report feeling “more confident” for the first time since the economic crisis began, according to a survey by the Confederation of British Industry and consulting firm Pricewaterhouse Coopers LLP.
In the U.S., the Institute for Supply Management’s index of non-manufacturing businesses, which make up almost 90 percent of the economy, rose to 50.9 in September, higher than forecast,the first expansion in a year, according to the Tempe, Arizona- based group. Fifty is the dividing line between expansion and contraction.
“The resilience of the services sector is buoying up sentiment and helping the pound,” said Jeremy Stretch, a senior currency strategist at Rabobank International in London. “There is some cautious optimism.”
(source: Bloomberg news)
0 comments:
Post a Comment