FX round-up: Pound gains alongside US dollar

The pound avoided the weakness against the US dollar evident elsewhere in the currency markets, albeit at a heavy price, 122bn pounds in extra borrowing over the next Parliament to be exact, as announced by the Chancellor in his Autumn Statement.

Cable was trading up by 0.18% to 1.2438 as of 2006 GMT after having hit 1.2360 earlier in the day.

Sterling was also stronger against the single currency, with euro/GBP down 0.85% to 0.84, and the yen as GBP/yen jumped 1.51% to 139.95.

Otherwise, it was generally a good day for the US dollar, with euro/dollar slipping 0.66% to 1.0553, while dollar/yen pushed ahead to 1.32% to 112.51.

Some analysts also appeared to turn somewhat more positive on the euro as it approached its most recent lows.

"Importantly, French [government bond] spreads vs Bunds have widened far more drastically than those of other Eurozone countries and the EUR has underperformed despite being 6 months away from the French elections and without any polling evidence that Mrs Le Pen is leading the race. We think that there is value in selling EUR/USD downside at current levels after the Republican primaries.

"On the other hand we are not turning bullish on French spreads to Bunds yet," UBS strategist Lefteris Farmakis said in a research note sent to clients.

Overall, the US dollar index climbed 0.61% to 101.66.

Stronger-than-expected data on US durable goods orders referencing the month of October were the main factor behing the rise in the US dollar.

Worth noting, some analysts chose to highlight the foot-dragging from euro area officials when it came to applying stimulus.

In that regard, Michael Hewson, chief market analyst at CMC Markets, commented: "It could be that European markets are starting to suffer on the basis that European governments remain unwilling to act in a manner to support their own economy’s in the same way that the US government and now the UK government appear willing to do so to theirs, as central bank policy continues to run out of road."