Sterling hits €1.19/£1

Published: 15 December, 2011

Sterling hit the highest level against the euro for nearly 10 months yesterday, breaking through €1.19/£1 barrier.

Currency rates - December 15

EURO/GBP - 1.1874

US$/GBP - 1.5475

CHF/GBP - 1.4675

CAN$/GBP - 1.6041
AUS$/GBP - 1.5603
ZAR/GBP - 12.9498
JPY/GBP - 120.6
HKD/GBP - 12.0418

NZD/GBP - 2.0628

SEK/GBP - 10.7992

AED/GBP - 5.683

US$/EURO - 1.3015

Lack of confidence in a solution to the debt crisis prompted the upsurge and the risk of downgrades gathered pace. Negative sentiment towards the euro did however drive sterling lower against the US dollar as investors looked to it as a safer haven. Sterling is not necessarily being driven by any UK data, more the lack of confidence in the euro. One slight positive for sterling was that Spencer Dale, chief economist at the Bank of England, felt that inflation would not fall as fast as predicted and as such he would not necessarily support further Quantitative Easing.

The euro suffered yesterday again falling to a 10 month low against sterling and an 11 month low against the US dollar. Concerns are high over the impact of potential sovereign debt rating downgrades after several rating agencies this week warned of possible European wide cuts to credit ratings. Italy also struggled to auction a round of five year bonds and ended up paying record costs for its five year borrowing.

In the USA, stock markets dropped for a 3rd straight day as investors concerns that Europe was not containing the debt crisis impacted on stock purchases. The US dollar strengthened against most currencies as investors looked to the safer haven of the currency to avoid losing out.

Elsewhere, the Swiss franc dropped to the weakest level in nine months ahead of a meeting later today where the Swiss National Bank will decide whether to further weaken the currency. Call in now for a live exchange rate.

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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