Trading has been extremely volatile for sterling exchange rates since the UK election and continued yesterday after Germany’s ban on naked short selling of some securities the previous day had triggered risk aversion, sparking wild moves in the currency market.
A sell off in commodities related currencies, including the Australian and New Zealand dollar, which are perceived to be higher risk, dragged sterling lower against the USD and YEN which are deemed a safe haven for investors.
The one thing that markets and investors dislike the most is uncertainty. With problems in all the markets (American, European and Asian) all closing down quite significantly yesterday I feel that the pound could be the loser come the end of the day.
Today however the Aussie, Kiwi and Rand have reversed their losses and the pound is down by 1% against AUD, 1.36% against the NZD and 0.68% against the ZAR.
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