Sterling reaches six month high against dollar

Published: 23 April, 2012

Sterling reached a six month high against the US dollar of 1.6140 last week and monthly retail sales figures came in much better than anticipated.

Currency rates - April 23

EURO/GBP - 1.2228

US$/GBP - 1.6099

CHF/GBP - 1.4698

CAN$/GBP - 1.6012

AUS$/GBP - 1.5592

ZAR/GBP - 12.6091

JPY/GBP - 130.851

HKD/GBP - 12.4996

NZD/GBP - 1.9741

SEK/GBP - 10.915

AED/GBP - 5.9134

US$/EURO - 1.3168

INR/GBP - 84.12

This week's main releases include figures for public sector net borrowing and the preliminarily quarterly GDP data which investors hope will be positive following the upbeat retail sales figures.

The Euro had a very strong day on Friday strengthening against the majority of currencies as German IFO business climate figures came in much better than expected. Contrary to this positive sentiment, Spain's benchmark 10 year bond yield breached the 6% level again on Friday causing yet more concern for the troubled nation. Euro zone Purchasing Managers' Index (PMI) is the main release from the region this week; moreover, the European Central Bank's president is also speaking. The markets will still keep a very close eye on the developments in Spain which have moved the markets a great deal recently.

The US dollar performed poorly on Friday as the markets absorbed positive data released from both the UK and Germany and in anticipation of the Federal Open Market Committee (FOMC) announcements this week. This week the markets will pay very close attention to the FOMC's interest rate decision and the influential press conference that follows; with some market leaders expecting the report to hint at the potential for further quantitative easing.

Elsewhere, the Japanese yen performed poorly on Friday and Canadian core CPI released came in as markets had predicted. The Bank of Japan and Reserve Bank of New Zealand's official cash rate decisions will be watched closely by investors this week.

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