Pound Declines Before Policy Makers Meeting

The pound lost versus several

key-currencies today and specially versus its regional rival, the euro, as traders speculate that U.K.’s financial authorities will insist in quantitative easing measures to stimulate the British economy, affecting the sterling outlook in currency markets.

The British currency posted a declining session versus most of the 16 main traded currencies two days before a Bank of England policy makers meeting, where, according to analysts, the current asset purchasing program will not be suspended, declining even further attractiveness for the pound, as the recession in the U.K. remains rather significant and measures are necessary to attempt starting a faster economic acceleration in the country. Even if the real estate market is providing positive data in the U.K. since November, the sentiment regarding the economic future in the nation is rather misty, stopping the pound to advance in foreign-exchange markets.

U.K.’s central bank strategy is following a different, and dovish, path than most of the wealthy nation’s policy makers. While interest rate hikes talks are a global trend, in the U.K., quantitative easing extensions are still possible, and this has a intense impact in the pound’s rates.

EUR/GBP traded at 0.8979 as of 19:10 GMT from a previous reading of 0.8945 yesterday. GBP/USD traded at 1.5983 from 1.6090.

Romanian Leu Hits 6-Month High as Political Crisis Eases

The Romanian leu rallied today versus the euro and the U.S. dollar as interest rates were unexpectedly cut in the country after a political crisis that delayed an IMF bailout finally ended, adding confidence that stability in the parliament will lead the nation towards a faster recovery.

After interest rates were cut today to 7.5 percent at the lowest level in a year, the leu rose versus most of the main currencies, as a political crisis ended regarding disputes that affected the process of obtaining and using a $30 billion bailout provided by the International Monetary Fund to the Eastern European nation. The optimism regarding better economic days for Romania with political stabilization helped the leu to rally today.

EUR/RON closed at 4.1838 from an opening rate of 4.2137. USD/RON ended the day at 2.9033 from 2.9139.

Mexican Peso Extends Rally on U.S.

The Mexican peso is benefiting from the U.S. economic outlook for 2010, as Mexico has the U.S. as the main destination for its exports, both raw and manufactured, and an accelerated growth of its neighbor is helping Mexico’s currency to gain in

foreign-exchange markets.

The peso continued to profit today from a better confidence towards its main trading partner, the U.S., as well as for increased crude oil rates, since the Latin American nation is one of the main oil suppliers for the U.S. together with Canada, helping the peso and the loonie to trade high in the beginning of 2010.

USD/MXN traded at 12.8190 as of 20:13 GMT from an opening rate of 12.8750.