Sterling had poor day yesterday, but remained flat against US dollar

Published: 14 June, 2012

Sterling had a poor day yesterday, weakening against the majority of currencies but remaining fairly flat against the US dollar.

Sterling had a poor day yesterday, weakening against the majority of currencies but remaining fairly flat against the US dollar.

Currency Rates

EURO/GBP - 1.2314
US$/GBP - 1.5488
CHF/GBP - 1.4801
CAN$/GBP - 1.5914
AUS$/GBP - 1.5562
ZAR/GBP - 12.9731
JPY/GBP - 122.90
HKD/GBP - 12.0080
NZD/GBP - 1.9936
SEK/GBP - 10.8854
AED/GBP - 5.6855
US$/EURO - 1.2561
INR/GBP - 86.28

The euro was fairly stable yesterday and made gains against both sterling and the US dollar. The leader of the Greek Syriza party (the biggest 'anti-bailout' party) pledged to keep Greece in the euro yesterday but wants to renegotiate the bailout deal with the EU and the IMF. However, the bailout package is deemed to be non-negotiable, so we will have to see what exactly this means going forward. Spanish bond yields remain high and an Italian one year bond auction saw its yields jump by 1.5% underlining investors' concern in the region and for those countries in particular. Today we have an Italian bond auction of longer dated bonds and any significant increase in interest demanded by investors could be negative for sterling. Europe-wide inflation data is the main release on the agenda today but the focus will remain on the run up to the Greek election on Sunday and any development that may occur in Spain and Italy.

The US dollar was particular weak yesterday following the release of a string of bad data which led to investors speculating that the central bank may look to inject more money into the economy to stimulate growth. Both retail sales figures and the monthly Producer Price Index were below markets estimates. More influential data is released today in the form of figures depicting the change in the number of people claiming unemployment benefits and figures showing the change in the price of goods and services purchased by consumers.

Elsewhere, the Japanese yen performed well yesterday recovering from Monday's losses while the Australian and New Zealand dollar were also fairly strong. Late last night saw the release of the official rate decision, press conference and monetary policy statement from the Reserve Bank of New Zealand; while the rate decision for the Swiss National Bank will be announced first thing this morning.

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