Sterling hit a one month high against the euro yesterday of €1.1748/£1, coming close to the highest level since March.
Sterling hit a one month high against the euro yesterday of €1.1748/£1, coming close to the highest level since March.
Currency rates - December 8
EURO/GBP - 1.1701
US$/GBP - 1.5698
CHF/GBP - 1.4493
CAN$/GBP - 1.5849
AUS$/GBP - 1.5270
ZAR/GBP - 12.6355
JPY/GBP - 121.81
HKD/GBP - 12.2093
NZD/GBP - 2.0096
SEK/GBP - 10.5531
AED/GBP - 5.768
US$/EURO - 1.3412
The rise came after a German official played down market expectations of a comprehensive solution to the euro crisis being announced on Friday. Weak industrial data for the UK was largely ignored as the focus intensifies on the outcome of Friday's summit. Industrial output slipped at the fastest pace in six months in October, raising further concerns over the UK recovery as the economic picture deteriorates further.
The euro fell after a German official said that Berlin was becoming pessimistic over the likelihood of a comprehensive solution being announced on Friday, as many governments failed to grasp the gravity of the situation. A key focus of the summit is the level of progress towards fiscal integration whilst minimising the moral hazard of any political changes. The European Central Bank is widely expected to cut interest rates today.
In the USA, the US dollar yet again took a back seat to the European debt crisis and the build up to Friday's EU summit and today's (expected) interest rate cut. Barclays Capital yesterday amended their US dollar/ sterling forecasts to reflect a general movement from euros towards the US dollar over the coming months, meaning that sterling is now expected to drop steadily towards $1.50/£1 over the next 12 months.
Elsewhere, the Australian dollar strengthened yesterday after GDP growth figures came in at 2.5% - beating expectations by nearly 1%. Australian growth has been strong, yet the Reserve Bank of Australia has begun to cut interest rates to cope with potential slowing demand from China.
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.