The pound stabilised this week following a period of decline, as Ebola’s impact spread to the currency markets.
The pound suffered a three-day decline against the euro this week, but has stabilised once more. Sterling slipped amid concerns surrounding the economy, but new figures from the Office for National Statistics revealed that GBP has grown 0.7 per cent in third quarter of 2014, a positive sign of improvement that has now boosted the currency.
Indeed, the pound rose by just under 0.1 per cent today, reports Reuters, but it was enough to halt a 0.3 per cent drop in recent months, as the Bank of England’s impending interest rate rise weighed heavy on the market.
The other factor that has entered the currency race is Ebola. A doctor based in New York City was taken to hospital, prompting the dollar’s gains to slow. Since then, the Japanese yen has strengthened, as the currency is regarded as as safe haven for investors.
Indeed, uncertainty continues to be a mnajor driving force in currency trading – and the potential spread of Ebola is no different. There is some debate between experts how much of an impact Ebola will have.
“I think for the time being the market is not pricing (Ebola) in as a serious risk,” Boris Schlossberg, managing director of currency strategy at BK Asset Management in New York, told Reuters.
Nonetheless, it was enough to halt Japan’s currency from declining for a sixth day in a row against the dollar. Indeed, the yen strengthened against most of its 16 counterparts.
“We’re seeing a fall in equity futures and dollar-yen on fears of a potential pandemic,” Greg Gibbs, the head of Asia-Pacific markets strategy at Royal Bank of Scotland Group Plc in Singapore, told Bloomberg.
“There is a bubbling fear percolating in the background. Ebola is certainly on the market’s radar.”
Source: The Movechannel