How does M&A support a particular currency?

M&A = Merger And Acquisition

I have been hearing that M&A has been supporting GBPUSD up..

HOW can M&A push GBPUSD up?

What Company Merger and Aquisition will do that?

http://today.reuters.com/news/articl...CIAL-DEALS.XML

For instance: ** A group led by Australia's Macquarie Bank Ltd. (MBL.AX: Quote, Profile, Research) won a battle to buy Thames Water in a deal that values the UK utility at 8 billion pounds ($14.84 billion), including debt. To read more, please double click on [nB726063]

It would appear that soon we should see a large purchase of GBP from an Aussie source. This is an interesting area of research, i've dabbled in it but have not done extensive research on how one woudl time when the actual buy would take place. It may be the market is already building this into the price.

I see... So Its a matter of Demand for a particular money to pay off a merger.

In your example, Aussies buying a British company. This would result in higher demand for USD from AUS and then converting USD to GBP. The total effect is lowered value for AUS, then a lowered value for USD and highered value for GBP.


Or is there a direct exchange from AUD -> GBP?

Several months ago, japanese company SoftBank bought a british company Vodafone for some GBP2B... so does that imply there GBPJPY would rise?
(but of course it did as evident by the current 220s exchange rate)

So that is how M&A affects currencies. Its a matter of Supply and Demand.

Thanks!