Sterling hits low against US dollar

Published: 06 September, 2011

Sterling depreciated by 0.7% against the US dollar yesterday, hitting the lowest level since mid-July, but gained slightly against the euro.

Currency rates & Comments - September 6

EURO/GBP - 1.1419
US$/GBP - 1.6094

CHF/GBP - 1.2772

CAN$/GBP - 1.5945
AUS$/GBP - 1.5277
ZAR/GBP - 11.4906
JPY/GBP - 123.61
HKD/GBP - 12.5506

NZD/GBP - 1.9368
SEK/GBP - 10.4122
US$/EURO - 1.4075

The UK Purchasing manager's index came in lower than expected indicating orders for materials are likely to be low this month. This figure in the past has been seen to match the growth/ decline of the UK economy. A stalling UK economy seems to be of growing concern and speculation over further quantitative easing has returned once again. As long as investors continue to suspect this, sterling will be held back.

In the Euro zone, the euro had a turbulent day falling to a one month low against the US dollar as Italian and Greek fiscal issues continue to grow. Euro zone retail figures remained the same and came in as expected, a good sign as the Euro zone is in need of stable household consumption to recover. However, European stocks fell after an unexpected decrease in support for Angela Merkel's party, demonstrating the German public's discontent of having to contribute to euro zone bailouts.

The US dollar had a relatively stable day versus the euro and sterling as demand for safe haven currencies increased. Despite this, a report showed that the US dollar had weakened by 11% against a basket of nine major currencies. Concerns over the US entering another recession is still a probing issue for investors, particularly after Friday's abysmal unemployment data. Investors await Thursday's conference between President Obama and Congress as they are expected to put forth new proposals for US job growth.

Elsewhere, the South African rand fell to its lowest in a week against the US dollar. The Australian and New Zealand dollar also fell against the US dollar by 1%. Out on Wednesday there is Australian GDP figures and Japan's interest rate decision. This may cause significant movement.

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. www.SmartWineSpirits.com

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