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Sterling hits $1.6172/£1 low against dollar

Published:  05 September, 2011

Sterling hit a low against the dollar on Friday, as data showed a fall in UK construction activity- the slowest expansion since December 2010.

Sterling hit a low against the dollar on Friday, as data showed a fall in UK construction activity- the slowest expansion since December 2010. 


Currency rates - September 5.

Currency Rates

EURO/GBP - 1.1428
- 1.6146

CHF/GBP - 1.2685

CAN$/GBP - 1.5964
- 1.5291
- 11.4956
- 124.06
- 12.5843

NZD/GBP - 1.9228
- 10.4188
- 1.4114

This has increased signs that the UK economy is making a sluggish recovery. There has also been further speculation that the Bank of England may need to put in place more quantitative easing which could damage sterling further. Sterling came in at $1.6172/£1 as US data also revealed that no new US jobs were created in August. Out today is PMI economic activity data and if this data comes in weaker than expected, we could see more selling.

In the Euro zone, the euro fell 0.4% against sterling and also hit a three week low versus the US dollar, shedding almost 2.1%. Concerns over the euro zone debt crisis expanded as dissatisfaction about Greece's lack of progress with solving the debt issue has increased amidst the EU and IMF. Investors have picked up on this, making the common currency less appealing. Retail sales figures are out today which will give a clear indication of how spending and consumer confidence in the region is doing.

In the US, the dollar slipped 2.6% against its safe haven competitor the Swiss franc. This was largely due to weak employment data in the US where the jobless rate held at 9.1%. As the US economy seems to be at the brink of stalling, the likelihood of the Federal Reserve adopting a third round of quantitative easing has returned to the table. Market players are waiting for Thursday's meeting where President Obama and Congress will discuss what measures to take in order to boost the US economy and create more jobs. Financial markets in the US are closed due to Labor Day holiday today.

Elsewhere, the Swiss franc made significant gains against a majority of its peers, particularly the euro where it almost hit a record weekly high. A report on Friday showed the Swiss franc has risen by 13% this year and has been the best performer among 10 developed market currencies. Commodity currencies such as the Australian dollar made gains on Friday. The rand declined 1% against the US dollar after US employment data came in weaker than expected. Call in now for a live exchange rate.

Smart Currency Exchange is a currency partner to Harpers Wine and Spirit. Harpers Wine and Spirit has teamed up with Smart to provide readers with a free bespoke currency service.