ND: Pound Surges To New Multi-week High Against Yen
During early deals on Monday, the pound jumped to a new multi-week high against the yen as Britain's top share index rose 2 percent in early trading today as investors are hopeful about an imminent U.S. plan to clean up the financial system by absorbing toxic bank assets and about the impact of recent measures to stabilize financial markets and shore up key economies.
The pound also climbed to a 5-day high against the euro and the franc, but eased from a 1-month high against the dollar.
At 5:11 am ET, the FTSE 100 index .FTSE was 75.51 points higher at 3,918.35. The blue-chip index gained 6.3 percent last week and closed 25.92 points higher at 3,842.85 on Friday, but is still down 11.6 percent this year.
U.S. Treasury Secretary Timothy Geithner is expected to provide details on the public-private partnership to remove bad loans from the banking system later today, though investors were already lifting equities and selling safe havens such as dollar and yen.
Global equities have been rallying for nearly two weeks on confidence the financial system was stabilizing after some of the largest U.S. banks said they had solid results in the first two months of the year, feeding confidence among investors to buy back riskier assets and slowly let go of safe havens.
UK's leading business group, the Confederation of British Industry, urged Chancellor of the Exchequer to deliver a confidence-building Budget, which would support jobs, investment and competitiveness through the recession and beyond.
In a submission to Chancellor of the Exchequer Alistair Darling before the April 22 budget, the CBI also urged for a clear and credible strategy to get the public finances back under control.
The CBI warned that the alarming state of the public finances rules out the option of a further significant fiscal stimulus, which would undermine business and institutional investor confidence in the UK.
The pound, which closed last week's trading at 138.35 against the yen strengthened to 140.70 in early deals on Monday. This set the highest point for the pound since March 05. If the pound-yen pair climbs further, it may find resistance around the 141.6 level.
The yen slumped as a government report showed that confidence among Japanese manufacturers worsened in the first quarter of 2009 as the deepening global recession spurred a record decline in exports and factory outputs.
Japan's Finance Ministry and Cabinet Office said that the large company business sentiment index came in at -51.3 in the first quarter of 2009, compared to -35.7 in the fourth quarter. Negative readings indicate more companies are pessimistic about the economy than are optimistic. The survey's large manufacturers index deteriorated to minus 66.0 versus the fourth quarter reading of minus 35.7.
