Sterling hits high of €1.18/£1

Published: 13 December, 2011

Sterling surged against the euro yesterday after investors shed the single currency.

Currency rates & Comments - December 13

EURO/GBP - 1.1821

US$/GBP - 1.5596

CHF/GBP - 1.4618

CAN$/GBP - 1.6007
AUS$/GBP - 1.5438
ZAR/GBP - 12.8841
JPY/GBP - 121.42
HKD/GBP - 12.1389

NZD/GBP - 2.0364

SEK/GBP - 10.7260

AED/GBP - 5.727

US$/EURO - 1.3180

Concerns over the EU summit saw sterling jump above €1.18/£1 for the first time since February. The euro shed 1% against a stronger pound after Friday's EU summit failed to restore confidence that policymakers could reach a solution. The main headline for the UK has been David Cameron's decision to veto the EU treaty on Friday and there was talk that this could isolate the UK from Europe in the long term. Despite this, many analysts expect sterling to strengthen against the euro as European policymakers struggle to implement new rules.

The euro plummeted as analysts struggled to comprehend how the 17 euro zone nations would implement the new tougher measures agreed on Friday. Following the UK veto, it is up to the remaining countries in the EU to enact laws to entrench binding debt ceilings and punishments, but many analysts are struggling to comprehend how quickly this will address the immediate concerns over liquidity.

In the USA, the US dollar strengthened yesterday after investors looked to the safe haven of the currency as risk appetite plummeted. Higher yielding currencies such as the Australian dollar fell notably.

Elsewhere, along with other commodity backed currencies, the Canadian dollar fell to the lowest level in December as Moody's credit rating agency said that it would review the credit ratings of all EU nations following Friday's summit.

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.

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