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Sterling steadies due to EU summit meeting

Sterling had a steady day with most of the news generated in Europe over the EU summit meeting in Brussels.

Currency rates - January 31

EURO/GBP - 1.1944

US$/GBP - 1.5735

CHF/GBP - 1.4397

CAN$/GBP - 1.5737
AUS$/GBP - 1.4797
ZAR/GBP - 12.309
JPY/GBP - 120.04
HKD/GBP - 12.2036

NZD/GBP - 1.9122

SEK/GBP - 10.6011

AED/GBP - 5.7783

US$/EURO - 1.3167

INR/GBP - 77.92

At one stage sterling hit a one month low against the euro hitting resistance at €1.19/£1. Although risk aversion was heightened there was little significant movement either against the US$ or the commodity backed currencies.

The EU Economic Summit seemed to be a success with progress being made on fiscal unity and stricter budget disciplines. The only country to join the UK on the sidelines was the Czech Republic. One significant step forward was the agreement of a €500 billion European Stability Mechanism which is to come into force in July this year. This is much earlier than expected. The major short term problem for the euro is the on-going talks about Greek debt. Still very slow progress is being made. Default day is the  March 20. The market view seems to be that any short term strength in the euro will be short lived.

In the US we had the release of personal income and expenditure figures for December. These highlighted the fall in real spending by the US population towards the end of the year and show that although the US economy is moving forward it still has a long way to go.

Elsewhere the Japanese yen gained ground on increased risk aversion. The belief though is that the Japanese government will try and devalue the Yen in the short term to fuel an export led recovery.

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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