Sterling ends week on low against US dollar

Published: 25 November, 2011

The weekly currency round-up has seen sterling fall to a seven week low against the US dollar, leading investors to shun 'riskier' currencies.

Smart rates & Comments - November 25

This week - (Last week)

EURO/GBP 1.1620 - (EURO/GBP 1.1697)

US$/GBP 1.5495 - (US$/GBP 1.5767)

CHF/GBP 1.4271 - (CHF/GBP 1.4492)

CAN$/GBP 1.6218 - (CAN$/GBP 1.6248)

AUS$/GBP 1.5958 - (AUS$/GBP 1.5830)

ZAR/GBP 13.1751 - (ZAR/GBP 12.9680)

JPY/GBP 119.70 - (JPY/GBP 121.21)

HKD/GBP 12.0614 - (HKD/GBP 12.2906)

NZD/GBP 2.0841 - (NZD/GBP 2.0767)

SEK/GBP 10.7746 - (SEK/GBP 10.7210)

AED/GBP - 5.681 (AED/GBP 5.796)

US$/EURO 1.3314 - (US$/EURO 1.3501)

The fall is due to lack of progress on the euro zone crisis, which has seen the pound come under pressure as the crisis intensifies. Sterling has also suffered as a result of downbeat comments from several commentators including Bank of England policymaker Ben Broadbent who said that the UK risks sliding back into recession. Minutes from the Bank's recent meeting showed that policymakers voted unanimously to keep monetary policy on hold. Sterling has held at around €1.16/£1 all week, well supported given the debt crisis in Europe.

It has been yet another volatile week in the euro zone. Germany failed to sell the full allocation of bonds it put to auction earlier in the week, which it put down to the low rates being paid, but which many took as the first signs that investors felt the crisis had spread to the European powerhouse. If confidence continues to drop in Germany, we could see sterling strengthen against the euro, so ensure you are prepared to take advantage.

In the USA, with markets closed yesterday for the thanksgiving holiday, volatility was higher given the lack of available currency. The US dollar hit a seven week high against the euro after German Chancellor Angela Merkel said that she didn't think common euro zone bonds were necessary. The German chancellor's resistance to the idea of common European bonds - which many see as one solution to the crisis - is causing concern.

Elsewhere this week, the upside of investors looking for lower risk currencies is that sterling has had a bumper week against the commodity backed currencies. The pound jumped above 2.10 against the NZ dollar for the first time since April and it hit a further twoyear high against the South African rand.

Supplied by Nick Ryder of Smart Currency Exchange, the currency partner to Harpers Wine and Spirit who have teamed up with Smart to provide readers with a free bespoke currency service. Go to www.smartcurrencybusiness.com/winespirit for more information or call on 0207 898 0500.

Printer friendly version