Sterling losses on terror raid expected to be short-term
The fall in the value of the pound after the foiled terror raid is expected to be short-lived.
Initially sterling was unaffected by police raids but after the knock-on effect of massive delays at UK airports the pound was down but eventually clawed back many of the losses to now stand at $1.89330, 219.075 yen and 1.48150.
However, any losses are expected to be remade in the long-term as they have after previous alerts.
Hans Redeker, global head of FX strategy at BNP Paribas told Reuters yesterday: "When bombs did explode in London, there was only a limited impact. Today there wasn't even a bomb.
"If there had been a real move out of sterling you'd have seen much more impact on gilts and shares."
Meanwhile in the US, the dollar was supported by figures for a slimmed down trade deficit and data showing an increase in consumer spending- adding weight to predictions further interest rate rises aiming to counter inflation.