Sterling fell to a four week low against the euro on Thursday as investors became optimistic over progress in Greek debt talks and concerned over UK economic weakness.
Sterling fell to a four week low against the euro on Thursday as investors became optimistic over progress in Greek debt talks and concerned over UK economic weakness.
Currency rates - January 18
Currency Rates
EURO/GBP - 1.1982
US$/GBP - 1.5668
CHF/GBP - 1.4454
CAN$/GBP - 1.5741
AUS$/GBP - 1.4778
ZAR/GBP - 12.2922
JPY/GBP - 120.88
HKD/GBP - 12.169
NZD/GBP - 1.9104
SEK/GBP - 10.659
AED/GBP - 5.7610
US$/EURO - 1.3092
INR/GBP - 77.62
UK data from the Confederation of British Industry showed there was a far worse contraction in sales than had been anticipated. Sterling strengthened against the US dollar, hitting the highest level against the US currency since December 22, after breaking through the $1.57/£1 barrier. However, poor GDP figures on Wednesday and the further likelihood of poor UK data are set to limit sterling's upside against the US dollar over the longer term.
In the euro zone, the euro hit a five week high against the US dollar on speculation over the progress of Greek debt negotiations. Rumours circulated that Greece's private creditors had agreed to lower the amount paid to them as interest on their bond holdings in order to reach agreement on time and avoid a messy default.
In the USA, the US dollar weakened yesterday and global stock markets gained as markets reacted to optimism over a potential solution to the Greek debt situation. In addition, the announcement earlier in the week that the Federal Reserve would keep interest rates on hold for up to two years helped drive risk appetite and deliver the first signs of a resurgent carry-trade.
Elsewhere, gold prices were steady at their highest level in over a month on the news of the Fed's policy stance. Low interest rates make gold more attractive and help investors hedge against inflation, as they gain from increasing commodity prices that inevitably follows cheap borrowing costs.
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.