Sterling has mixed week

Published: 09 March, 2012

Sterling had a mixed week after worse than expected Purchasing Managers' Index (PMI) and Halifax Price Index data dampened the UK economic outlook.

Smart currency - March 9

Currency Rates

EURO/GBP 1.1947

US$/GBP 1.5801

CHF/GBP 1.4404

CAN$/GBP 1.5648

AUS$/GBP 1.4856

ZAR/GBP 11.861

JPY/GBP 129.06

HKD/GBP 12.2610

NZD/GBP 1.9171

SEK/GBP 10.6240

AED/GBP 5.8061

US$/EURO 1.3220

INR/GBP 78.94

Risk aversion drove the market on Monday and Tuesday before risk appetite took over as the Greek private sector debt swap neared approval. As widely expected, the Bank of England held its benchmark interest rate at 0.5% and kept the asset purchase program on hold at £325 billon yesterday.

The Euro had a turbulent week as fears surrounding a potential Greek default reared its head once more before the markets recovered due to the suggestion that the Greek bondholder's debt swap would be agreed. The European Central Bank (ECB) left rates unchanged as widely expected and the ECB's President stated that he felt recent data showed a "stabilization in the euro area economy". Despite the positive rhetoric from the ECB president and the suggestion that the debt swap will be confirmed, the underlying problems still exist so the markets could easily turn on the euro very quickly.

The USD strengthened due to its safe haven status as risk aversion dominated the market before weakening off as the markets fears subsided. The service sector unexpectedly rose at the fastest rate in a year and mixed employment data was released. The markets look towards today's trade balance data and moreover the Non-Farm Payrolls release which often causes a hefty impact on the market.

Elsewhere, the Japanese yen had an extremely volatile weak due to the midweek change in risk sentiment and the currency's "safe haven" status. China's growth forecast reduction to 7.5% was one of the most influential releases of the week stoking fears of a Global slowdown. The Bank of Canada, Reserve Bank of Australia and the Reserve Bank of New Zealand all kept their interest rates unchanged as widely anticipated.

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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