Sterling strengthens due to property market push

Published: 20 September, 2011

Sterling strengthened for a second day against the euro after data from property website, Rightmove showed 0.7% increase in house values for September.

Currency rates - Sept 20

EURO/GBP - 1.1502
US$/GBP - 1.5680

CHF/GBP - 1.3874

CAN$/GBP - 1.5557
AUS$/GBP - 1.5361
ZAR/GBP - 12.1088
JPY/GBP - 119.93
HKD/GBP - 12.2245

NZD/GBP - 1.9142
SEK/GBP - 10.5282
US$/EURO - 1.3628

The Bank of England BoE, quarterly bulletin has also indicated that the quantitative easing programme introduced in March 2009 has raised UK GDP by 2%. Although sterling depreciated against the yen yesterday, hitting its lowest in over two-and-a-half years.

In the euro zone, concerns over Greek default continue. European stocks terminated their four day rally whilst the common currency depreciated 1.4% against the US dollar. If Greece does not meet the conditions of rescue loans, the country will not receive its sixth tranche of loans to prevent default. Additionally, with Germany's ruling coalition receiving another electoral defeat, public dissatisfaction with Merkel's choices regarding the euro zone is being becoming evident.

In the US, the US dollar rallied against the Swiss franc due to growing concerns over a Greek default. Though the Swiss franc is the 'go to' currency in times of turmoil, the Swiss National Bank's recent decision to weaken the currency against the euro has inadvertently pushed more investors towards the US dollar. Yesterday President Obama called for tax increases (mostly targeting high earners) as another part of his plan to cut the US deficit.

Elsewhere, the rand depreciated to a one year low versus the US dollar. The South African currency fell as much as 2.1%, the weakest level since July 2010. Asian currencies also weakened, particularly South Korea's won. There is increasing worry that Europe's debt crisis is restricting global economic growth and in turn damaging the region's exports.

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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