Sterling makes slight gains in gloomy market

Sterling gained against the US dollar on Friday afternoon, but remains close to a one year low due to concerns over the global economic outlook.

Currency rates - September 26

EURO/GBP - 1.1517
US$/GBP - 1.5456

CHF/GBP - 1.4044

CAN$/GBP - 1.6005
AUS$/GBP - 1.5994
ZAR/GBP - 12.8145
JPY/GBP - 117.97
HKD/GBP - 12.0527

NZD/GBP- 2.0122
SEK/GBP- 10.7488

US$/EURO - 1.3406

The pound also strengthened against the euro on speculation that Greece will not be able to secure another bailout package. However, these gains are temporary as concerns over global economic growth continue. Data on Friday showed mortgage approvals in the UK increased by 14% from last year, with lenders granting up to 35,226 new loans to purchase homes.

The euro rose by 0.6% against the US dollar rebounding after an eight month low after G20 policy makers' agreed to take the necessary measures to prevent the European debt crisis from undermining the financial market and the banks. Though this may have helped the common currency, investors are still uncertain that the measures put forth will be able to contain the debt crisis from spreading on a global basis. Reports over the weekend suggest that euro zone leaders are ready to throw trillions of euros at the debt crisis.

In the US, the US dollar extended losses versus sterling and the euro as market players placed bets on the greenback's rally on Thursday. The US dollar also weakened against the yen trading at almost post World War II lows. The US dollar-yen relationship is a good indicator of how much or how little safety investors think they need. US stocks plunged again on Friday as there are growing fears of global economic stagnation.

Elsewhere, the rand weakened 4.5% against the US dollar on Friday. South Africa's central bank also left lending rates at a 30 year low of 5.5% to slow down any further price pressures. The yen on the other hand is strengthening on the back of economic turmoil. In fact, the yen has appreciated 11.4% in three months. Investors seek safety in the yen due to its surplus on current accounts.

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