Subscriber login Close [x]
remember me
You are not logged in.

Currency update June 30: Investors desert the euro

Published:  30 June, 2010

Currency update June 30: Sterling hit a 19 month high against the euro yesterday as investors deserted the euro ahead of bank repayments to the European Central Bank.

Currency rates: June 30 AM

EURO/GBP - 1.230
US$/GBP - 1.503
CHF/GBP - 1.626
CAN$/GBP - 1.578
AUS$/GBP - 1.761
ZAR/GBP - 11.509
JPY/GBP - 133.32
HKD/GBP - 11.705
NZD/GBP - 2.168
HUF/GBP - 352.49

The pound hit €1.2380 as a key deadline looms on Thursday for the repayment of loans made to banks in the Euro zone. Sterling was also supported after the launch of a 30 year gilt (UK government bond) was received well by financial markets.

Lending data released yesterday showed that net lending to individuals had increased to £1.5 billion but final mortgage approvals fell slightly. Today, we have seen house price data show prices rise by a mediocre 0.1% month on month against an expectation of 0.3%.

Despite the wave of positivity that has followed the Budget, there are still several issues that need addressing in the UK, and these figures are showing that there is potential for another housing slump.

In the Euro zone, sentiment towards the region has taken another punishment as concerns over liquidity in the Euro zone have left investors concerned.

On Thursday, a €442 billion lending facility from the European Central Bank expires. This has prompted overnight lending rates to increase and widening gaps between government bond spreads. We will have to see what happens over the next few days.

In the USA, with a fairly quiet week so far on the economic calendar, the big news was that consumer confidence fell on the month. A lot of data in the US has suggested that the US recovery is stalling somewhat so a decline in confidence did not come as too much of a surprise.

Elsewhere, Australian private sector credit and loans to buy houses increased yet again and beat economists' expectations. However, new home sales fell to a two year low - showing a conflicting assessment of the property market. It might be due to the heavy programme of interest rate hikes over the last few months.

* 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