Subscriber login Close [x]
remember me
You are not logged in.

Sterling falls against the dollar but rises against the euro

Published:  21 October, 2011

Sterling fell against the dollar but gained against the euro according to Smart Currency Exchange's currency analysis for Harpers.

Currency rates, October 21
EURO/GBP - 1.1459
US$/GBP - 1.5771
CHF/GBP - 1.4029
CAN$/GBP - 1.6054
AUS$/GBP - 1.5561
ZAR/GBP - 12.8942
JPY/GBP - 121.15
HKD/GBP - 12.2819
NZD/GBP - 1.9934
SEK/GBP - 10.4523
AED/GBP - 5.799
US$/EURO - 1.3756

Sterling fell after an earlier rally against the US dollar yesterday, but gained against the euro after investors questioned how much progress would be made in the European debt crisis over the weekend.

Sterling got an earlier boost against the US dollar as an unexpected jump in retail sales in the UK saw a short-lived rally die out following the view that this would do little to change the faltering UK recovery's prospects.

Sales rose by 0.6% but sterling is being bogged down by the possibility of more Quantitative Easing. Minutes from the Bank of England's meeting this week showed the distinct possibility of further easing in the medium term.

In the euro zone, the euro has had a very volatile week ahead of Sunday's European summit as traders speculated whether the summit will deliver a decisive solution to solve the region's debt crisis. The ebb and flow between optimism over a comprehensive solution has contrasted with market rumours over German scepticism - especially from the country's finance minister, leaving a very choppy market this week. This is set to continue into next week and no-one really knows the impact that the summit will have.

If markets approve sterling could plummet (albeit briefly) against the euro, but if they do not, we could see a run into the 1.15's. Ensure you are prepared and why not consider an order to buy to take advantage if the rate does move.

In the USA, data released earlier in the week showed that consumer prices increased by 0.3% but the 'core' (i.e. inflation that excludes volatile energy) price inflation only increased by 0.1%. Unemployment figures crept up slightly, but the major driver of the US dollar has been the market expectations with regards to the euro zone. The US dollar strengthened by 0.6% against the euro yesterday. There is serious volatility so ensure you speak to one of the team to ensure you are protected.

Elsewhere, sterling did make gains against 'riskier' commodity based currencies - notably the South African rand. Sterling gained by 2% to hit the highest levels against the rand since November 2009. It therefore goes without saying that if you need to buy South African rand, now is a great time.

* Supplied by Nick Ryder of Smart Currency Exchange, the currency partner to Harpers Wine and Spirit who have teamed up with Smart to provide readers with a free bespoke currency service. Go to for more information or call on 0207 898 0500.