The pound gains. Sterling up at the start of December.
The pound rose on Friday ahead of the weekend, after better than expected Non Farm Payrolls data from the USA.
As I outlined in Fridays post, the report is highly volatile. Analysts expected the figure to show a decline of over 100 thousand jobs. However, the actual figure was an astonishing 11 thousand. This is much much better than expected, and has given confidence in the US markets.
How does this help the pound?
Confidence in the US Markets mean investors that have been hoarding US Dollars due to the currencies safe haven status, are now investing into riskier currencies. Sterling is one that is benefiting, and this is the reason the pound rose on Friday.
However, the gains may be short lived over fears of our level of debt. There’s the governments pre budget report next week, and there are rumours there will be some bad news on the amount the UK owe, and the ways in which it’s going to be paid back.
So, this could be the start of a recovery for the pound, or it could be a short term spike ahead of the pre budget report, as if this is bad the pound could fall back below €1.10.
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More updates on where Sterling GBP exchange rates will go throughout December, and into 2010 on Monday.