Strong Gains in British Pound Following Hot Manufacturing Data

The British pound rallied strongly today following news that factory orders hit the highest level in 12 years. Even though more firms reported shrinking demand from abroad, the jump in the export and price indices pushed the overall index back into positive territory.

Over the past few days, we have seen multiple reasons alluding to why the Bank of England has not done much to help stabilize the UK financial markets. Even though the economy is vulnerable, for the time being, it remains stable. Traders were also relieved after the Bank of England downplayed the recent usage of emergency loans. They said that the line of GBP314 million was small and not unusual. Apparently over the past year, the facility was tapped 13 times with the largest amount borrowed being GBP4 billion.