Pound strengthens versus euro

The pound strengthened versus the euro Thursday on hopes that the worst of the credit crisis is over in the UK and on new index numbers from the Chartered Institute of Purchase and Supply that are the highest they’ve been since 1999, but at the same time the British currency dropped value in relation to the US dollar due to the belief that the Bank of England will cut interest rates again soon.

The pound traded at 78.22p to the euro at late morning in New York, while at the same time it took $1.9745 to buy a pound.

Meanwhile, the US dollar gained on the euro again on Thursday as investor sentiment was that Wednesday’s quarter-point interest rate cut to 2 percent will be the last rate cut for awhile and on new data showing that US manufacturing activity contracted less in April than had been expected.

The euro was hurt by sentiment that the European Central Bank will have to cut interest rates, perhaps more than once, before the year is out.

At just past 11 a.m. in New York, the dollar traded at $1.5445 to the euro it also gained on the Swiss franc to SFr1.0487, on the Norwegian krone to kr5.1590 and on the yen to ¥104.9750.

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