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Sterling slips against euro

Sterling started the day poorly against the euro due to negative UK Nationwide house price data which was released on top of an increased positive outlook in the Euro zone.

Currency rates - January 18

EURO/GBP - 1.2014

US$/GBP - 1.5834

CHF/GBP - 1.4494

CAN$/GBP - 1.5799
AUS$/GBP - 1.4758
ZAR/GBP - 12.1091
JPY/GBP - 120.58
HKD/GBP - 12.2822

NZD/GBP - 1.8994

SEK/GBP - 10.6320

AED/GBP - 5.8145

US$/EURO - 1.3172

INR/GBP - 77.68

The manufacturing Purchasing Managers Index [PMI] for China came in much better than expected boosting public opinion of a more stable global economy as a whole. The more positive outlook resulted in sterling strengthening against the US dollar and the Japanese yen as risk appetite drove the market. The risk of a double dip recession in the UK appears to have eased with UK manufacturing PMI coming in much better than expected reaching an eight month high.

The euro pushed higher yesterday on the back of better than expected manufacturing PMI data released across Europe and China; moreover, solid Euro zone bond auctions eased the negative sentiment towards the Euro zone and Portugal in particular. Furthermore, the Greek Finance Minister stated that the debt agreement with private investors is only "one step" away and the Greek Prime Minister is seeking backing from political leaders for more austerity measures calming the market.

The US dollar reversed earlier gains as the markets took comfort in the solid manufacturing data released in China and the Euro zone. Worse than expected data released in the form of non-farm pay roll and manufacturing PMI reiterated the feeling that the US road to economic recovery will be a long one.

Elsewhere, the New Zealand dollar and Australian dollar performed well yesterday with increased risk appetite driving in the market. Swiss retail sales and their PMI came in worse than expected and the Japanese Finance Minister repeated that he is watching the currency market closely, so keep an eye out for any action taken to devalue the Yen.

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.