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Sterling falls against dollar as investors anticipate UK Quantitative Easing

Published:  04 October, 2011

Sterling fell against the US dollar yesterday, hitting a low of $1.5450/£1 as investors anticipate the Bank of England introducing further Quantitative Easing in the UK.

Sterling fell against the US dollar yesterday, hitting a low of $1.5450/£1 as investors anticipate the Bank of England introducing further Quantitative Easing in the UK.

Smart currency rates - October 4

EURO/GBP - 1.1682
US$/GBP
- 1.5444

CHF/GBP - 1.4194

CAN$/GBP - 1.6250
AUS$/GBP
- 1.6214
ZAR/GBP
- 12.6740
JPY/GBP
- 118.46
HKD/GBP
- 12.0350

NZD/GBP -2.0357
SEK/GBP
-10.6370

US$/EURO - 1.3214


UK data surprised the markets, with manufacturing activity showing a marginal expansion against analyst expectations. Services sector data is released on Wednesday and with the economy struggling, this is expected to be poor. Sterling did however hit the highest level against the euro since March, coming just short of €1.17/£1 as investors became more and more concerned with the debt crisis in the euro zone.

In the euro zone, debt concerns in the region continued to dominate currency market movements, with investors taking a risk adverse stance for the start of the week. The euro fell to the lowest level against the Japanese yen since June 2001 as investors looked to safer haven currencies as European policymakers looked to thrash out a deal to solve the crisis. In addition, monetary policy is back on the agenda, with many expecting the ECB to look to cut interest rates as early as this week. 

In the USA, manufacturing figures followed the UK in beating expectations and showing an improvement contrasting with a slowdown in Chinese manufacturing. The US dollar hit an 8.5 month high against the euro on concerns over the debt crisis. Many analysts feel that the euro is set to fall much further against the US dollar.

Elsewhere, as a result of the euro zone crisis and concerns over a cooling of growth in China, the risk sensitive Australian dollar fell to a 10 month low against the US dollar. A slowdown in China will affect demand for Australian commodities and as such, dent Australian prospects. 


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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