Sterling strengthens despite weak PMI data

Published: 06 March, 2012

Sterling had a strong day yesterday strengthening against the majority of currencies although it did remain fairly flat against the euro.

Currency rates - March 6

EURO/GBP - 1.2004

US$/GBP - 1.5839

CHF/GBP - 1.4482

CAN$/GBP - 1.5782

AUS$/GBP - 1.4914

ZAR/GBP - 12.0568

JPY/GBP - 128.90

HKD/GBP - 12.2982

NZD/GBP - 1.9401

SEK/GBP - 10.6312

AED/GBP - 5.8242

US$/EURO - 1.3191

INR/GBP - 79.25

Weak services Purchasing Managers' Index (PMI) data dampened the UK's economic outlook early on before sterling rallied throughout the rest of the day on the prospect of the Greek private sector debt swap being approved.

The euro traded in a very similar pattern to sterling yesterday strengthening against the majority of currencies whilst remaining fairly flat against sterling. Economic data was mixed showing a lack of confidence overall in the Euro zone economy. Greek bondholders are expected to take part in a debt swap this week which will write off about 100 billion euro's. If the deal does not get approved by the March 8, deadline it will cause a great deal of volatility in the markets.

The US dollar had a mixed day yesterday, the dollar weakened against the euro and sterling; but, strengthened against the commodity backed currencies. The service sector unexpectedly rose at the fastest rate in a year providing yet more evidence of economic growth from the US. There is not a great deal of data out today as the US eyes the unemployment data released later on in the weak for further indication on the state of the world's largest economy.

Elsewhere, the Japanese Yen had a strong start to yesterday due to China reducing its growth forecast to 7.5% which stoked fears of a Global slowdown. The Australian Reserve Bank decided to keep interest rates on hold at 4.25% but made it clear that they would cut rates if the world economy affected the demand for Australian goods. This led to the Australian dollar being under pressure.

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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