Sterling recovers after Quantitative Easing shock

Published: 10 October, 2011

Sterling recovered against the US dollar on Friday, after The Bank of England shocked markets last week by announcing a £75bn second round of Quantitative Easing.

Currency rates - October 10

EURO/GBP - 1.1530
US$/GBP - 1.5618

CHF/GBP - 1.4277

CAN$/GBP - 1.6090
AUS$/GBP - 1.5790
ZAR/GBP - 12.2510
JPY/GBP - 119.68
HKD/GBP - 12.1620

NZD/GBP - 2.0074
SEK/GBP - 10.5270

US$/EURO - 1.3536

In addition, better than expected US employment figures helped give sterling a boost due to improved risk appetite. Some had been expecting sterling to suffer after credit rating agency Moody's downgraded 12 UK banks, but the pound shrugged this off.

The euro has started the week fairly well after positive news from the weekend after a meeting between Angela Merkel and Nicolas Sarkozy on the European debt crisis. A pledge from both leaders to help recapitalise banks, settle the Greek debt crisis and help boost growth in Europe gave risk sentiment a boost. This move was a welcome relief after rating agency Fitch downgraded Spain's credit rating by two notches.

In the USA, the US dollar weakened on Friday after much better than expected non-farm payroll figures helped to boost risk appetite amongst global investors.

Elsewhere, the Swiss franc fell to a 4 ½ month low against the euro as news filtered through over the Franco-German pledge to solve the European crisis. There were also rumours that the Swiss National Bank might look to weaken the franc further by amending the exchange rate peg currently in place against the euro.

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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