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Sterling surges against euro hitting €1.1594/£1

Published:  01 November, 2011

Sterling surged against the euro by close to 2%, hitting a high of €1.1594/£1, after yields on Italian bonds rose as the country struggles to implement tough spending cuts.

Sterling surged against the euro by close to 2%, hitting a high of €1.1594/£1, after yields on Italian bonds rose as the country struggles to implement tough spending cuts.

Currency rates - November 1

EURO/GBP - 1.1620

US$/GBP - 1.6017

CHF/GBP - 1.4136

CAN$/GBP - 1.6090
AUS$/GBP
- 1.5425
ZAR/GBP
- 12.8425
JPY/GBP
- 125.18
HKD/GBP
- 12.4534

NZD/GBP - 1.9972
SEK/GBP
- 10.5162

AED/GBP - 5.888

US$/EURO - 1.3769


Sterling also hit the highest levels against the Japanese yen for two months after the Japanese authorities intervened to drive the yen lower. Against the US dollar, sterling came under pressure but held on to gains made on Friday and finished the day flat.

 

In the euro zone, the euro fell against both the euro and US dollar on poor data and surging Italian bond yields. Figures showed Italian and European unemployment creeping up and lower than expected German retail sales figures. Data has been poor in the last month and many expect the European Central Bank's meeting to be the main focus later in the week. If the ECB fails to take a looser stance with monetary policy we could see the euro lose ground.

 

In the USA, the US dollar jumped to a three month high against the Japanese yen following Japan's intervention in the currency markets over the weekend. Analysts estimated that the Bank of Japan intervened with a record $65-75bn in order to protect domestic exporters from record highs on the currency. The focus for the USA this week continues to be the Federal Reserve's meeting that starts today. The Fed could potentially implement further monetary easing in the coming months, which could see the US dollar fall.

 

Elsewhere, tensions between China and the USA took another step yesterday as the USA accused China of failing to implement commitments over the opening of its financial services markets that it made 10 years ago in order to join the World Trade Organisation. The USA accused China of deliberately taking an unduly long time to approve requests by US companies to open branches in the country.

 

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 serviceGo to www.smartcurrencybusiness.com/winespirit for more information or call on 0207 898 0500.

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