Pound gains on Barclays news

The US dollar and the Japanese yen declined and the pound saw gains Monday after the euro was helped by an announcement from Barclays Bank (LSE: BARC; NYSE: BCS; TYO: 8642) that it will not need to raise more capital due to revenue raised in its US unit by its acquisitions from the bankrupt Lehman Brothers Holdings in 2008.

The news hurt the yen as it sent some investors back to risky carry trades, where higher-yielding currencies are purchased in deals funded by lower-yielding currencies such as the yen.

Meanwhile, the US dollar was helped by new data from the National Association of Realtors showing that existing homes sales in the United States unexpectedly grew by 6.5 percent in December.

Home sales were boosted by a 15.3 percent decline in the median price of a home to $175,400, the biggest year-on-year drop in 40 years, with prices in the Western US down by an even bigger 31.5 percent from the year before.

Still, existing home sales for the full year dropped 13 percent to 4.9 million homes.

In late morning trade in New York, the yen traded at ¥89.375 to the greenback, at ¥117.3516 to the euro, and at ¥124.3392 to the pound.

The pound traded lower at 94.38p to the euro at about 11:30 a.m. in New York, but the UK currency was up in relation to the US currency as the dollar traded at $1.3912 to the pound and at $1.313 to the euro.

Story link: Pound gains on Barclays news