Sterling remains buoyant against euro zone fears

Published: 11 January, 2012

Sterling hovered near a 16 month high against the euro on Tuesday due to investor concerns that the euro zone crisis will deepen.

Currency Rates - January 11

EURO/GBP - 1.2115

US$/GBP - 1.5481

CHF/GBP - 1.4701

CAN$/GBP - 1.5708
AUS$/GBP - 1.5012
ZAR/GBP - 12.5259
JPY/GBP - 118.91
HKD/GBP - 12.0115

NZD/GBP - 1.9454

SEK/GBP - 10.6829

AED/GBP - 5.678

US$/EURO - 1.2752

INR/GBP - 79.86

The pound also held on to gains against the US dollar despite a risk of sterling falling against the currency on safe haven demand from the US dollar in coming months.

In the euro zone, sentiment towards the euro continued its downward spiral after Nicolas Sarkozy and Angela Merkel failed to reach a solution to the euro zone crisis on Monday and concerns grew that Greece is close to default. The more time taken by European officials over the debt crisis, the more that the euro is set to weaken against its counterparts. Out later today there is the final GDP figures for the 4th quarter of 2011 and tomorrow sees the ECB's interest rate meeting.

In the USA, the US dollar weakened marginally in US trading as market sentiment improved on the back of strong expectations for US corporate earnings and strong data being released from the USA. Data released on Monday showed that consumer credit for November expanded at an annual rate of 10% - the highest for 10 years. This increased lending is an indicator of an easing of lending restrictions by banks and a positive sign for the economy.

Elsewhere, data from China indicated that the country's trade surplus had increased by more than expected. Figures showed that the country exported $16.5bn more than it imported last month - a 13% increase on November's equivalent figures.

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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