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Currency update, July 27: sterling rallies against the dollar

Published:  27 July, 2010

Currency update for July 27 from Smart Currency Exchange: sterling hits five month high against the dollar.
For a bespoke currency service go to


Currency update for July 27 from Smart Currency Exchange: sterling hits five month high against the dollar. 
For a bespoke currency service go to

Currency rates July 27, AM
EURO/GBP - 1.190
US$/GBP - 1.547
CHF/GBP - 1.632
CAN$/GBP - 1.594
AUS$/GBP - 1.714
ZAR/GBP - 11.365
JPY/GBP - 135.12
HKD/GBP - 12.018
NZD/GBP - 2.105
EURO/US$ - 1.300
HUF/GBP - 338.98

Sterling hit a five month high against the US dollar in early trading this morning, tentatively reaching $1.5530/£1 in early trading as investors looked to target 'riskier' trades.

Following Friday's generally benign stress test results for European banks, stock markets rose globally yesterday as appetite for risk grew amongst global investors despite heavy criticism of the tests from many commentators for not going far enough.

Sterling has benefited from strong economic data recently and this has seen strength against the US dollar. Many analysts pointed to the fact that the pound is limited in where it can go against the US dollar simply by the sheer performance it has put in over the last week, but there is potential for the pound to strengthen further against the euro.

After a very quiet day yesterday on the data front, there is CBI realised sales data out today which is a useful indicator of sales volume/ performance amongst retailers and wholesalers.

In the Euro zone, the results of the European stress tests on Friday continue to be the main source of trading movement. Ninety one banks passed and only seven failed, which has prompted a surge in investor risk appetite, but the manner of the tests has attracted criticism for not delving far enough into the balance sheets of banks which are clearly in trouble.

So far today German consumer confidence has showed a mild improvement and later today there is money supply and private loans data. There is scope for significant movement.

In the USA, the major piece of data was US new home sales which provided a rare ray of light in an otherwise gloomy housing market. The figures showed a jump of 23.6% to an annual rate of 330,000 from a downwardly revised figure of 267,000 units in May.

This was the largest percentage jump since May 1980 and has been attributed to the expiry of tax credits in April which saw a record low figure in June. Out later today there is consumer confidence data which is expected to show a mild decline following recent poor data. But it is a good time to take advantage of the best US dollar prices for five months.

Elsewhere, Asian stock markets added 0.6% overnight following the rebound in US home sales data. A measure of Japanese inflation showed a decline of 1% in the year to June, pointing to more deflation, and Australian price data showed a rise of 0.3% following growth in rural goods exports.

Ensure you don't miss out on higher yielding currencies strengthening too far against the pound.

* Smart Currency Exchange is a currency partner to Harpers Wine and Spirit. Harpers Wine and Spirit has teamed up with Smart to provide readers with a free bespoke currency service.

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