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Sterling weakens due to subdued UK retail sales figures

Published:  07 August, 2012

Another difficult day for sterling due to subdued UK retail sales figures for July.

Another difficult day for sterling due to subdued UK retail sales figures for July.


Smart Currency rates & comments - August 7


EURO/GBP - 1.2574
US$/GBP - 1.5581
CHF/GBP - 1.5108
CAN$/GBP - 1.5588
AUS$/GBP - 1.4732
ZAR/GBP - 12.7250
JPY/GBP - 121.92
HKD/GBP - 12.0835

NZD/GBP - 1.9012
SEK/GBP - 10.4683
AED/GBP - 5.7212
US$/EURO - 1.2390
INR/GBP - 86.36

Although the Olympics are going well on the medals front there are worries as to what this will do to London retail figures for August. However the major influence continues to be news elsewhere.

The euro continues to benefit from the belief that the funding of government debts in the Euro zone is under control and that the European Central Bank can reduce southern state borrowing rates. I don't think any of us think this to be true in its entirety especially as the data being released today will highlight the parlous state of the Euro zone economy. We are approaching a key support level for sterling against the euro and any breach of this could see further weakness for sterling.

Sterling continues to trade in a narrow range against the US dollar unsure which way to go. Given the high level of US unemployment there is still a belief that the Federal Reserve will pump further funds into the US economy in September which should in theory weaken the US dollar.


The Australian dollar continues to strengthen as the expectation for reductions in their interest rates in the August meeting of their reserve bank recede. However it should be noted that it is at the lower end of a 12 cent range that it has been trading against sterling in for the last eighteen months. Given this a reversal in the Australian dollars fortune is more than possible.



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