Sterling slips against euro

Published: 18 January, 2012

Sterling slipped against the euro yesterday as falling inflation reinforced expectations that the Bank of England would ease monetary policy further in the coming months.

Currency Rates - January 18

EURO/GBP - 1.2032

US$/GBP - 1.5356

CHF/GBP - 1.4551

CAN$/GBP - 1.5591
AUS$/GBP - 1.4791
ZAR/GBP - 12.3096
JPY/GBP - 117.72
HKD/GBP - 11.9142

NZD/GBP - 1.9130

SEK/GBP - 10.6031

AED/GBP - 5.637

US$/EURO - 1.2764

INR/GBP - 77.76

UK inflation fell sharply in December with the CPI index dropping from 4.8% to 4.2% backing up the Bank of England's view that inflation may have peaked. Many now expect this to have given a green light to the Bank to open the taps on further Quantitative Easing as early as next month. Many investors are becoming more and more concerned over poor data from the UK which has been largely ignored in recent weeks as markets look for alternatives to the euro.

The euro strengthened overnight after strong Chinese data improved risk appetite in the Asian trading session. However, with key talks resuming between Greece and its creditors later today after they broke down earlier in the week, markets are tense. Only a voluntary agreement will suffice or we could be heading towards an imminent Greek default which will cause mayhem.

In the USA, the US dollar weakened off after risk appetite was given a boost by a record jump in German economic sentiment yesterday. In addition, data released yesterday in the USA showed that manufacturing activity increased by more than expected. With the focus on the Greek renegotiations, expect the US dollar to see some strength today as investors look towards the currency as a safe haven. Call in now for a live exchange rate.

Elsewhere, yesterday saw Chinese GDP growth come in at 8.9% - beating expectations of a 8.7% rise. The Australian dollar strengthened as a result given the strong correlation between the currency and growth in China. Call in now for a live price to ensure you don't lose out.

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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