Sterling falls against dollar

Published: 17 January, 2012

Sterling fell against the US dollar yesterday, trading within reach of an 18 month low.

Currency rates - January 17

EURO/GBP - 1.2040

US$/GBP - 1.5374

CHF/GBP - 1.4576

CAN$/GBP - 1.5564
AUS$/GBP - 1.4751
ZAR/GBP - 12.3048
JPY/GBP - 117.74
HKD/GBP - 11.9368

NZD/GBP - 1.9206

SEK/GBP - 10.6334

AED/GBP - 5.645

US$/EURO - 1.2759

INR/GBP - 78.36

Investor concern over euro zone credit rating downgrades impacted on risk appetite and saw safe haven demand for US dollars. Sterling stayed well supported against the euro as issues with European downgrades and concern over a potential Greek default saw investors avoid the single currency.

In the euro zone, the euro floundered near a 17 month low against the US dollar yesterday and an 11 year low against the Japanese yen as Friday's mass downgrades of ratings across nine countries threatened the lending ability of the European bailout fund. Talks to renegotiate repayments between Greece and its creditors broke down, leaving a higher and higher risk of a 'disorderly' default by the country as opposed to the carefully managed one that had been envisaged.

In the USA, the markets were closed yesterday for a bank holiday and sterling hovered near an 18 month low against the US currency. It will be tough for the US dollar to strengthen beyond $1.52/£1 as it is a key 'technical' level for many traders.

Elsewhere, the resignation of Swiss National Bank chair Phillipp Hildebrand in the wake of several dubious foreign exchange transactions by his wife has had little or no impact on the swiss franc. After several large transactions ahead of the SNB's announcement of a target exchange rate that saw a 10% move, the chairman had been forced to resign after accusations of insider trading.

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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