Sterling climbs to 15 month high

Published: 05 January, 2012

Sterling climbed to a 15 month high against the euro yesterday after investors moved away from the ailing single currency.

Currency rates - January 5

EURO/GBP - 1.2054

US$/GBP - 1.5588

CHF/GBP - 1.4721

CAN$/GBP - 1.5828
AUS$/GBP - 1.5156
ZAR/GBP - 12.8080
JPY/GBP - 119.79
HKD/GBP - 12.1108

NZD/GBP - 1.9890

SEK/GBP - 10.6742

AED/GBP - 5.728

US$/EURO - 1.2907

INR/GBP - 82.18

With the UK economy - despite its weaknesses - looking relatively stronger than the euro zone, investors have been moving funds into UK based holdings. With the UK economy set for a tough period as the government maintains austerity measures in order to keep the AAA rating, sterling could drop off later in the year.

In the euro zone, Germany managed to find adequate demand at an auction for 10-year government bonds yesterday, but left the markets underwhelmed and concerned over the ability of sovereigns within the region to raise funding on the bond markets. The lacklustre bond issue sets up a tense few days as France looks to sell bonds on Friday and Italy and Spain do so next week. Poor demand on Thursday could be seen as a case for France losing its AAA rating, which would further dent the single currency.

In the USA, the US dollar strengthened yesterday as risk appetite turned sour in the face of the poor bond auction in Europe. US stock markets followed European stock markets down as concerns centred on the euro crisis once more.

Elsewhere, the drop in risk appetite saw the riskier commodity backed currencies fall back marginally yesterday as investors moved out of the higher yielding currencies and into safer options.

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