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Currency update, July 29: sterling stays strong

Published:  29 July, 2010

Currency update for July 29 from Smart Currency Exchange: sterling rides the waves.
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Currency update for July 29 from Smart Currency Exchange: sterling rides the waves. 
Get bespoke drinks currency advice at

Currency Rates, July 29 AM

EURO/GBP - 1.198
US$/GBP - 1.561
CHF/GBP - 1.646
CAN$/GBP - 1.615
AUS$/GBP - 1.735
ZAR/GBP - 11.440
JPY/GBP - 136.45
HKD/GBP - 12.133
NZD/GBP - 2.153
EURO/US$ - 1.302
HUF/GBP - 339.25

Sterling breached the $1.56/ £1 barrier as investors ignored downbeat comments from the Bank of England Monetary Policy Committee after a run of better than expected UK data. The pound continued to ride the wave of strong GDP and better than expected retail sales data and this saw investors treat sterling with optimism.

Bank of England governor Mervyn King warned that strong second quarter growth data should not mean that monetary policy should tighten up; pointing out that significant risks still face the UK economy and that interest rates could drop further if needed.

The pound shrugged off these comments and continued to strengthen against the US dollar after poor data from the USA left investors feeling happier holding sterling. Out today there is key house price data and lending data.

In the Euro zone, the euro weakened against sterling marginally and the pound briefly broke through the €1.20/£1 barrier before falling back off. Data from the euro zone showed that German inflation remained the same at 0.2%.

Out today were German unemployment figures which were expected to show an improvement, but not at the same rate as last month. There is still concern from some analysts that the euro is far too overvalued following the heavily criticized stress tests.

In the USA, the US dollar fell against the pound after data on durable goods orders came in far worse than expected. 'Durable goods' orders are orders placed for the manufacture of trains, machines etc. - anything that takes several months to build. It is used as a measure of future growth in the economy, and this month showed a drop of 0.6% when it was expected to rise by 0.6%.

The poor figures saw investors move funds into sterling as the UK is increasingly becoming a more attractive investment versus the USA. Get in touch now, as we have already seen further strength this morning from the pound.

Elsewhere, the New Zealand dollar fell against other currencies despite a widely expected interest rate rise, after the Royal Bank of New Zealand governor actively downplayed the recent strength of the NZ dollar and said that further rate rises should not automatically be assumed.

* 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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