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Sterling remains steady, ahead of Bank of England meeting

Published:  09 February, 2011

Limited UK economic data led to a steady day for sterling against most other currencies.

Limited UK economic data led to a steady day for sterling against most other currencies. 

Currency Rates

EURO/GBP - 1.1783
US$/GBP - 1.6070
CHF/GBP - 1.5489
CAN$/GBP - 1.5981
AUS$/GBP - 1.5878
ZAR/GBP - 11.5970
JPY/GBP - 132.50
HKD/GBP - 12.5170
NZD/GBP - 2.0834
SEK/GBP - 10.3488
US$/EURO - 1.3636

The UK government has increased the levy to be raised on the banks to £2.5 billion. This hasn't gone down well with the banks. The market is waiting for the Bank of England meeting tomorrow and any shock announcements on interest rates. So volatility could increase in the run up to mid-day tomorrow.

In the Euro zone German industrial production for December came in below expectations. So it isn't just the UK that caught a cold from December's bad weather. But just like here the German economy continues to grow and the underlying strength of Germany's industrial sector should never be underestimated.

Yields on US treasury bonds continue to rise. This is lending some support to the US$ in the short term although the response to the US$32 billion issuance of three year debt was disappointing. The market could see further increases in US debt yields.

China increased interest rates for the second time in six weeks. Inflation would seem to be key and something the Chinese authorities are keen to get on top of. One of the problems is that by keeping their currency artificially low they are beginning to see the cost of their imports grow significantly. Initially the Australian, Canadian and New Zealand dollars lose ground but this was soon reversed.

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