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Sterling holds firm despite Chancellor's downbeat forecast

Published:  30 November, 2011

 

Sterling stayed firm against the US dollar and strengthened above €1.17/£1 against the euro despite a downbeat forecast by the Chancellor in his autumn statement.

Sterling stayed firm against the US dollar and strengthened above €1.17/£1 against the euro despite a downbeat forecast by the Chancellor in his autumn statement.

Currency rates - November 30

EURO/GBP - 1.1701

US$/GBP - 1.5522

CHF/GBP - 1.4351

CAN$/GBP - 1.6088
AUS$/GBP
- 1.5609
ZAR/GBP
- 13.0961
JPY/GBP
- 121.21
HKD/GBP
- 12.1039

NZD/GBP - 2.0470

SEK/GBP - 10.7749

AED/GBP - 5.71

US$/EURO - 1.3272

Growth forecasts for 2012 were downgraded to 0.7% from an estimated 2.5% in March and the Office of Budget Responsibility expects the economy to contract by 0.1% in the 4th Quarter of 2011. Poor data in past weeks has also cemented the gloomy outlook for the economy with retail sales dropping by the highest level for two-and-a-half years in October. Consumers have cut back on spending and inflation is holding at more than 5%. Sterling recovered as most of the bad news was factored into the exchange rates.

The euro rose for a second day against the US dollar as there was speculation that the European Central Bank may lend money to the IMF in order to help Italy cope with the debt crisis. Italy's borrowing costs have sky rocketed as investors have deserted the country in the wake of the recent crisis and left it having to pay more and more to borrow. Market sentiment yesterday seemed to suggest that European policymakers are taking action, which helped support the euro.

In the USA, a rebound in consumer confidence in November also gave investor risk appetite a boost and saw the US dollar weaken off from recent highs. Out later today there is pending home sales and building approvals figures - both key pieces of data in the assessment of the US recovery's prospects. 

Elsewhere, the boost in risk appetite saw the commodity backed currencies strengthen against the US dollar and sterling. The Australian dollar surged by 2% against the US dollar before pulling back later in the day.



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

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