The latest market moves
Although Standard & Poor’s has warned that the UK could lose its AAA credit rating this signal does not appear to have dampened any spirits. The pound has risen to its highest level in almost seven months against the US dollar and was within a whisker of this year’s high against the euro.
With the pound trading above $1.60 yesterday it meant that sterling was a little over 19% above the 23-year lows set back in January and 13% higher than the €1.02 all-time low against the euro at the end of last year.
So what is the reason for the pounds sudden upswing? According to foreign currency specialist No1 Currency the pound was undervalued anyway and the measures taken by the Bank of England have been favourably received by many economists and some now believe that the worst of the recession is over.
Perhaps more optimism is what is needed in the insurance industry. The banking sector fared better than LSE insurers this week. Catlin saw the biggest share price drop of 5.35%, while Amlin’s fell 2.07% and Hiscox 2.08%. Only Aviva saw a respectable rise in with 6.50%.
Meanwhile, RBS, Lloyds TSB, Barclays all enjoyed large rises this week while HSBC’s shares dropped 1.17%.