Strong US sales figures help boost sterling to month high

Published: 17 October, 2011

Stronger than expected US retail sales figures helped to boost global risk appetite helping Sterling to hit a one month high against the US dollar.

Currency rates - October 17

EURO/GBP - 1.1381

US$/GBP - 1.5820

CHF/GBP - 1.4077

CAN$/GBP - 1.5918
AUS$/GBP - 1.5429
ZAR/GBP - 12.3160
JPY/GBP - 122.53
HKD/GBP - 12.3090

NZD/GBP - 1.9670
SEK/GBP - 10.3960

AED/GBP - 5.795

US$/EURO - 1.3902

The pound closed the week up by over 1.5% against the US dollar, as investors pulled back bets against the pound, but the UK economy remains vulnerable. Growth is weak, public finances are still in a poor state and there is a large exposure to the euro zone which could have a large impact. One group of forecasters downgraded their expectations of UK growth to just 0.9% for 2011.

The euro has started relatively stronger this week due to strong US retail sales data and positive comments from the G20 meeting. The finance ministers pledged to ensure that banks were adequately capitalised and called for a comprehensive solution to the crisis to be announced at next week's EU summit.

In the USA, strong retail sales figures on Friday saw the US dollar weaken over the weekend and markets are looking towards today's industrial production number for further indications of better than expected growth in the last period. Positive comments regarding the euro zone should see risk appetite improve and the US dollar come under pressure.

Elsewhere, following the boost in risk appetite, the Australian dollar strengthened by 5.5% against the US dollar last week. Stronger employment figures reversed many analyst expectations of interest rate cuts and also helped boost the dollar's prospects. Call in now to ensure you are not adversely affected by currency market movements.

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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