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Sterling gains Verses the Dollar as equities rise and U.S payrolls come negative

Mon, May 11 2009, 12:23 GMT
by Benny Menashe

Finotec Group Inc.  |  View company's profile

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Sterling edged higher against the dollar on Friday, helped by buoyant investor confidence and rises on equity markets, but caution ahead of key U.S. payrolls data limited gains. Ongoing optimism that the worst of the global downturn is over helped to push UK shares up 1.7 percent on the FTSE, in tandem with gains on equities around the globe, which kept perceived higher risk currencies such as sterling supported. The news accompanied an expected decision to leave interest rates unchanged at a record low 0.5 percent. "The uptrend for sterling is still in place, both against the dollar and the euro, but technically there is a lot of congestion around current levels," Bank of New York currency strategist Neil Mellor said. The GBP/USD is currently trading at $1.5200 as of 8:40am, London Time.

The Euro held on to its latest highs against the dollar and the yen on Monday, after surging in the wake of smaller-than-expected U.S. job losses, while rising investor confidence underpinned the Australian and New Zealand dollars. The dollar index .DXY held close to a four-month low set on Friday after data showed the U.S. economy shed 539,000 jobs in April, bolstering hopes that the worst of the economic slump may be over. Analysts said that with several risk events out of the way, such as stress tests for U.S. banks and the jobs numbers, investors seemed more confident, although it was hard to see what there was in the way of near-term events to keep up that momentum. The EUR/USD is currently trading at $1.3605 as of 8:55am, London time.

Japan's Suzuki Motor Corp said on Monday it escaped a loss in the final quarter thanks to growth in its main Indian market, but forecast an 87 percent drop in profit this year as slumping global demand and a strong yen take their toll. Suzuki, a maker of compact cars such as the Swift hatchback, has been relatively shielded by its big exposure to India where it controls about half of the car market through local unit Maruti Suzuki India Ltd. Suzuki booked a fourth-quarter operating profit of 10.45 billion yen ($106 million), down 68 percent from the previous year but beating a consensus estimate of a 2 billion yen profit in a survey of 17 analysts by Thomson Reuters. The USD/JPY is currently trading at 98.12 as of 9:08am, London Time.

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Published on  Mon, May 11 2009, 12:28 GMT

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