By TraderVox.com
Tradervox.com (Dublin) – The sterling has declined against the euro for the third week in a row where it touched its weakest level in more than a month. The strong euro has been boosted by bets the European policy makers are doing everything possible to resolve the debt crisis dampening demand for the safe haven currencies. The pound remained little changed against the dollar after a report released last week showed gross domestic product climbed by one percent in the third quarter.
The pound declined against the euro as German parliament approved the rescue package for Greece after a Euro zone finance ministers meeting on November 27, agreed to ease rescue terms for debt-stricken country. UK gilts appreciated as the Bank of Canada Governor Mark Carney was appointed to lead the Bank of England, making him the first foreigner to head the bank.
According to Neil Jones, the head of European hedge-fund sales at Mizuho Corporate bank Ltd in London indicated that the pound decline against the euro has been instigated by the short-term European sentiments over Greece. He also noted that Carney is well respected and suggested that his appointment has been positive for the pound and UK assets. The pound has dropped by 1.4 percent over the last six months, making it one of the worst performing currencies among the ten developed nations’ currencies.
It dropped by 0.3 percent from its November 23 close to 81.18 pence per euro at the close of trading on Friday, dropping to its weakest level of 81.33 pence since October 23. The currency remained little changed against the dollar at $1.6023 and closed the week at $1.6011. According to Ian Stannard, a London-based currency strategist at Morgan Stanley, the selling mood for the sterling will turn more negative as the sterling has been relatively supported by the safety seeking mood in the market.
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