Tue 14th August 2012
The UK pound is a safe haven for several reasons. For one, the UK retains a AAA credit rating, meaning the trustworthiness of its ability to repay its debts is of the highest class. This is something neither France nor the USA can boast, encouraging investment. Second, the pound has benefited from the Swiss National Bank’s decision to peg the franc to the euro at 1.20. This reduces foreign capital inflows to Switzerland, and has left investors searching for an alternative safe place to store their cash. The UK fits the bill nicely. Lastly, the pound benefits from the simple fact that it’s not the euro. It hence receives funds the markets might otherwise park in Europe.
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I do hope this post has answered your question. To find out more about the UK pound: