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Sterling rises and rand declines for second week

Published:  19 September, 2011

Sterling rose by 0.7% against a weaker euro, and the rand declined for the second week in a row, due to uncertainty over the euro debt problem.

Sterling rose by 0.7% against a weaker euro, and the rand declined for the second week in a row, due to uncertainty over the euro debt problem.

Currency rates - September 19

EURO/GBP - 1.1481
US$/GBP
- 1.5732

CHF/GBP - 1.3869

CAN$/GBP - 1.5468
AUS$/GBP
- 1.5340
ZAR/GBP
- 11.8562
JPY/GBP
- 120.84
HKD/GBP
- 12.2635

NZD/GBP - 1.9115
SEK/GBP
- 10.5442
US$/EURO
- 1.3684

 

Investors are still uncertain on whether EU policy makers are taking sufficient steps to tackle the Euro zone debt. The pound also regained ground versus the US dollar after hitting a session low of $1.574/£1. Despite sterling making these slim gains, there is still growing sentiment that another round of quantitative easing will be introduced by November to help revive Britain's economy.

In the euro zone, the euro was down 0.7% against the US dollar after European finance ministers provided no indication of giving extra support to lenders. German Chancellor Angela Merkel also reiterated her objection to euro bonds on Friday. On the other hand, there is increasing speculation that all efforts are being undertaken by euro zone governments and we could see the common currency stabilise.

In the US, the dollar rose 0.1% against the safe-haven Japanese yen. However, investors are still reluctant to take long positions in the dollar particularly ahead of the Federal Reserve's September policy meeting scheduled for tomorrow and Wednesday. Investors are expecting the Federal Reserve to intervene in some form to stimulate the sluggish US economic growth. Many think borrowing costs for bonds will be kept low so as to support the US economy.

Elsewhere, the rand declined for a second week in a row and fell 0.9% to the US dollar. This is largely due to the deepening of the euro zone crisis which is slowing global economic growth. If the rand continues to decline, it will also eliminate the possibility of a cut in interest rates. On the contrary, Canada's dollar made a weekly gain versus all of its 16 trading peers. There are bets that the Canadian currency will appeal to a number of investors during turbulent moments in the market.


Smart Currency Exchange is a currency partner to Harpers Wine and Spirit. Harpers Wine and Spirit has teamed up with Smart to provide readers with a free bespoke currency service. www.SmartWineSpirits.com


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