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Sterling fell to 8-month low against dollar

Published:  15 September, 2011

Sterling fell to an eight-month low versus the dollar and also made losses against the yen, reaching its lowest since January 2009.

Sterling fell to an eight-month low versus the dollar and also made losses against the yen, reaching its lowest since January 2009.

Currency Rates
EURO/GBP - 1.1481
US$/GBP - 1.5761
CHF/GBP - 1.3824
CAN$/GBP - 1.5653
AUS$/GBP - 1.5428
ZAR/GBP - 11.712
JPY/GBP - 120.89
HKD/GBP - 12.294
NZD/GBP - 1.9332
SEK/GBP - 10.592
US$/EURO - 1.3735

Unemployment in the UK worryingly rose by 80,000 in three months to July. This data has increased the case for a possible slow down in austerity measures as well as an increase in demand for some kind of fiscal stimulus. Some investors think further quantitative will be introduced as early as next month. The cuts taking place in the UK have been viewed by some as too drastic with worries that these measures may in fact stunt UK economic growth.

In Euro zone, the euro weakened against the US dollar, erasing almost all its weekly gains. It also fell 0.5% to the yen. The weakening of the common currency is largely due to investors holding off from riskier currencies as well as being cautious prior to a conference call between policy makers in Greece, Germany and France. China's Premier, Wen Jibao also expressed concern with the need to solve this crisis, declaring that developed nations must cut deficits and create jobs rather than leaning on China to bail out the world economy. Out today is Euro zone consumer figures which will see whether prices have increased/ decreased for consumer goods and services.

In the US, the US dollar had a steady day making gains against the euro. This is very likely to be a result of hardly any concrete plans from Euro zone members to draw a line under the Greek debt crisis. This has caused market players to seek haven in the greenback rather than riskier assets. However, figures for retail and business inventories came in weaker than expected indicating a slowing American economy. A National Poll conducted by Bloomberg showed pessimism about the US economy has increased with only 20% agreeing that that the country is taking the right steps to avoid a recession. Out today there is also US consumer price figures.

Elsewhere, Canada's dollar weakened against the US dollar for a third day in a row along with other export lead currencies such as the Australian dollar and the Norwegian Krone. Moreover, The Reserve Bank of New Zealand held interest rates at a record low of 2.5%.

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