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Sterling surges against euro after disagreements in European Central Bank

Published:  12 September, 2011

Sterling surged against the euro on Friday as the European Central Bank pulled back from its policy of increasing interest rates and key policymaker, Juergen Stark, quit his position.

Sterling surged against the euro on Friday as the European Central Bank pulled back from its policy of increasing interest rates and key policymaker, Juergen Stark, quit his position. 

 

Currency rates - September 12

EURO/GBP - 1.1635
US$/GBP - 1.5812

CHF/GBP - 1.4018
CAN$/GBP - 1.5802
AUS$/GBP - 1.5348
ZAR/GBP - 11.597
JPY/GBP - 121.39
HKD/GBP - 12.338

NZD/GBP - 1.9429
SEK/GBP - 10.420
US$/EURO - 1.3591

Stark will step down in a dispute over the ECB's bond-buying programme. It shows how divided key decision makers are over the best way to deal with the euro zone crisis. This morning, we have seen sterling briefly hit €1.17/£1 as sterling gains support, but concerns over the UK's recovery has kept the pound under pressure against the US dollar.

 

In the euro zone, it is unlikely to be a quiet week in the region. The resignation of Stark goes to show the level of disagreement at high levels. The week ahead sees a meeting of the region's finance ministers on Thursday and a European parliamentary debate over the crisis on Wednesday which could add further dichotomy to the number of official views on the crisis. 

In the USA, there is important data released this week on both consumer and wholesale inflation. In addition, there are key gauges released in the form of the NFIB small business survey and the Empire State and Philadelphia Fed survey which will give an idea of the state of the economy. The US dollar has benefited from concern over the euro zone crisis.

Elsewhere, the Swiss franc continues to hover around the CHF1.20/ €1 mark after the Swiss National Bank last week announced that it would intervene to devalue its currency. Moves made last week saw the Swiss franc devalue by nearly 8% and sterling has gained even more, breaking above CHF1.40/£1. 


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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