Pound Sterling Price News and Forecast: GBP/USD is building strength for shifting the business above 1.2200
|GBP/USD eyes upside above 1.2200 as risk-on mood solidifies on Credit Suisse buyout
The GBP/USD pair is gathering strength is shifting its auction above the round-level resistance of 1.2200 in the Asian session. The Cable has found support as the appeal for the US Dollar Index (DXY) is declining amid rising expectations of a less-hawkish monetary policy by the Federal Reserve (Fed).
S&P500 futures are showing significant gains in the Asian session as UOB has confirmed a buyout for Credit Suisse. This has improved the risk appetite of the market participants as investors’ confidence is getting restored. Sky News reported that under the takeover UBS will pay 3bn Swiss francs (£2.6bn) to acquire Credit Suisse. And, it has agreed to assume up to 5bn francs (£4.4bn) in losses, and 100bn Swiss francs (£88.5bn) in liquidity assistance will be available to both banks. Read more...
GBP/USD pops in the open to test 1.2200
The US Dollar fell on Friday sending GBP/USD to test 1.22 the figure although further declines in the shares of Credit Suisse and First Republic Bank rattled markets and weighed on the pair later in the day. However, UBS is said to take over Credit Suisse in a deal aimed at stemming what was fast becoming a global crisis of confidence which is putting a bid back into the pair. GBP/USD is up by some 0.2% and trading back in the 1.22s.
The UBS and Credit Suisse deal is expected to be closed by the end of this year. Colm Kelleher, chairman of UBS Group, said the agreement "represents enormous opportunities". He also said that his bank's long-term aim would be to downsize Credit Suisse's investment banking business and align it with the "conservative risk culture" of UBS. Read more...
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