Sterling hits high, then loses ground

Published: 28 March, 2012

Sterling hit a four-and-a-half month high against the US dollar yesterday, before losing ground and ending the day where it started.

Currency rates - March 28

EURO/GBP - 1.1949

US$/GBP - 1.5950

CHF/GBP - 1.4424

CAN$/GBP - 1.5880

AUS$/GBP - 1.5295

ZAR/GBP - 12.156

JPY/GBP - 131.86

HKD/GBP - 12.3728

NZD/GBP - 1.9468

SEK/GBP - 10.639

AED/GBP - 5.8516

US$/EURO - 1.3324

INR/GBP - 81.15

Sterling traded in a similar pattern against the majority of currencies strengthening in the morning before retracing in the late afternoon. One of the members of the Bank of England suggested that the central banks interest rates could be raised sooner than initially anticipated; but, the markets still expect the Bank of England to keep to its wait-and-see approach for quite a time yet. Trade balance figures and the final quarters GDP for 2011 will be released today which provide are a good indicator of the state of the UK's economy.

The euro weakened off against sterling, the US dollar and the Swiss franc yesterday; but strengthened against the majority of commodity backed currencies. A weak Spanish bond auction and poor German consumer climate figures released yesterday did little to boost confidence in the Eurozone.

The US dollar strengthened against the majority of currencies yesterday; but, ended the day fairly flat against sterling as the Federal Reserve Bank suggested that it would keep monetary policy loose. On the data front, the Conference Board (CB) index representing consumer confidence came out as the markets had anticipated. The main data released today is the Core Durable Goods Orders figures which is expected to show a 1.6% increase in the total value of new purchase orders placed with manufacturers for durable goods.

Elsewhere, the Japanese yen had another weak day yesterday. The Chinese yuan also strengthened to a record high against the US dollar following the Chinese president stating that he will look to "let the market play a greater role" in determining the yuan's strength.

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