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Sterling holds steady as UK exports grow by 6.6%

Published:  11 July, 2012

Sterling gained ground against the euro on Tuesday and held steady against other currencies after the UK trade deficit for May bettered April and exports grew by 6.6%.

Sterling gained ground against the euro on Tuesday and held steady against other currencies after the UK trade deficit for May bettered April and exports grew by 6.6%.

Currency Rates - July 11

EURO/GBP - 1.2655
US$/GBP -
1.5526
CHF/GBP -
1.5201
CAN$/GBP -
1.5844
AUS$/GBP -
1.5175
ZAR/GBP -
12.6822
JPY/GBP -
123.20
HKD/GBP -
12.0429
NZD/GBP -
1.9504
SEK/GBP -
10.824
AED/GBP -
5.702
US$/EURO -
1.2267
INR/GBP -
85.91

 

The key influencers for sterling for the rest of the week is probably going to be news elsewhere especially out of Europe. Smart Currency is unsure whether the split is between price increases resulting from a stronger pound against the euro or volume increases from increased trade. It hopes it is the latter rather than the former but suspects it might the other way round.

 


The euro lost ground against the board yesterday, which was seen as slightly surprising as progress was made in supplying urgently required funds for the Spanish banks in a timely and flexible manner. This helped reduce yields on both Spanish and Italian government debt. The major problem is the lack of detail behind the policies put forward for resolving the longer term problems and this lack of detail increases the markets worries and uncertainties.

 



The US$ had a similar day to sterling, steady against a wide range of currencies but gaining ground against the euro. No major news out of the US yesterday but today we have the release of the minutes of the last meeting of the Federal Reserve. The markets will be reviewing the committees view on the necessity for further quantitative easing. The Chairman of the Federal Reserve has made it quite clear that if he thinks the US economy is not moving forward as he would like then he will increase liquidity which is usually bad for a currency.

 



China surprised the markets in two ways yesterday. Their trade surplus increased to over US$30 billion when expectations were for it to fall and this increase was on the back of imports not growing as fast as expected or as fast as exports. The level of imports increased worries on the state of the Chinese economy especially after last week's cut in interest rates.

 

 

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