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Currency update June 11, pound rises to a high of $1.4667/ £1

Published:  11 June, 2010

Currency analysis for June 11, 2010 from Smart Currency Exchange, Harpers Wine & Spirit's currency partners.

Currency Rates, June 11
EURO/GBP - 1.213
US$/GBP - 1.468
CHF/GBP - 1.678
CAN$/GBP - 1.518
AUS$/GBP - 1.738
ZAR/GBP - 11.322
JPY/GBP - 134.45
HKD/GBP - 11.443
NZD/GBP - 2.148
HUF/GBP - 338.55

Sterling rose yesterday driven by a stock market rally and the fact that many investors felt that poor sentiment surrounding the UK's record deficit had already been 'priced in' - where the price takes into account the deficit.

The pound rose to a high of $1.4667/£1 and hit €1.2147/ £1 against the euro as investors bought back into the pound following poor sentiment earlier in the week over a possible downgrade of the country's AAA credit rating.

The Bank of England kept interest rates on hold for the 15th month running and also kept the Asset Purchase Facility (quantitative easing) on hold at £200 billion. This was widely expected, and further settled the markets and helped add to the pound's strength.

In terms of data, there was little out aside from the Bank decision and out today we have manufacturing data which is expected to show a decline. There is however still concerns over the budget on June 22 which is holding the pound back.

In the Euro zone, French industrial production fell by 0.3% and the European Central Bank kept interest rates on hold at 1.0%. The euro strengthened following the press conference, as ECB president Jean-Claude Trichet made clear that the recent purchase of Government bonds by the emergency fund would not have any bearing on the ECB's monetary policy. The sentiment towards the region is still very poor and many analysts are forecasting €1.25/£1.

In the USA, a stronger than expected amendment to the trade balance saw investors look elsewhere today. The trade deficit dropped by $0.5bn to -$40.8bn. This saw an increase in risk appetite and meant that the US dollar weakened as investors looked to other currencies.

Unemployment data showed that 9,000 more people claimed for unemployment this month over last month, however the unemployment figures were already priced in after last Friday's poor Non Farm Payroll data.

Overnight, the Australian and New Zealand dollars fell against the US dollar as Chinese inflation data surged to 3.1% in May. This added further to the speculation that China needs to curb its ballooning economic growth, which will have a direct impact on demand for commodities from Australia and New Zealand. If you need to send funds to the southern hemisphere, now might be an ideal opportunity, as the AUS and NZ dollars are potentially going to weaken. Call in now for a price.

* Smart Currency Exchange is a currency partner to Harpers Wine & Spirit. Harpers Wine & Spirit has teamed up with Smart to provide readers with a free bespoke currency service. If you are making or receiving international payments and are interested in talking to Smart please go to: to get a FREE no obligation quote or to download the Smart Wine and Spirit report. Alternatively call Smart on 0207 898 0500.

* To get currency udpates direct to your email then contact Richard Siddle on