Wednesday saw the English pound climb against the European Union's common currency as investors' eyes fell on the alarming height of yields on Italian 10-year bonds, Bloomberg reports.
The high bond yields, which exceed the top level since when the euro first appeared in 1999, are symptomatic of the sovereign debt crisis' invasion of Italy's banks and public finance systems as Italy has displaced Greece as the focus of the debt scourge tearing through the euro zone. Yet damages are likely to be more significant given Italy's economy is the euro zone's third largest.
"The sovereign debt crisis in the euro zone is really driving everything, with everyone keeping an eye on Italian bonds," options and advisory head Andre de Klerk with Moneycorp told Reuters. "The UK isn't part of the euro and it has a bit of fiscal and monetary maneuverability but the euro zone is our biggest trading partner and this crisis will affect the UK significantly."
The strong performance placed the pound at its top level against the euro in eight months, according to Reuters.The pound has risen in three of the past four trading sessions against the Swiss franc, Bloomberg reports.
But the pound lost ground to the U.S. dollar, which Reuters linked with investors' interests in the surety of the greenback.
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