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Currency update, August 31: sterling quarterly quotes revised upwards

Published:  31 August, 2010

Sterling's movement last week was dictated by risk sentiment as sterling suffered on increased risk aversion at the start of the week but benefitted towards the end of the week due to gains in global stock markets.

Currency Rates
EURO/GBP - 1.216
US$/GBP - 1.542
CHF/GBP - 1.573
CAN$/GBP - 1.634
AUS$/GBP - 1.731
ZAR/GBP - 11.377
JPY/GBP - 130.04
HKD/GBP - 12.001
NZD/GBP - 2.202
EURO/US$ - 1.267
HUF/GBP - 349.25

Sterling's movement last week was dictated by risk sentiment as sterling suffered on increased risk aversion at the start of the week but benefitted towards the end of the week due to gains in global stock markets. UK quarterly growth was revised upwards which is encouraging due to the fiscal consolidation which will take place. However a closer look at the figures revealed this revision was largely down to an 8.5% increase in construction output which will be very difficult to sustain for the remainder of 2010. This has seen many analysts argue that growth is very likely to slow later in the year. This week is a fairy quiet week for data in the UK.

The euro has been little changed overnight against sterling and the US dollar. German unemployment figures will headline the European economic calendar today, with expectations calling for jobless claims to fall 20,000. The unemployment rate is expected to remain unchanged at 7.6%. This is a further sign that the euro is being supported by the good performance of Germany whose export economy is benefitting from the Euros weakness against the US$.

The US dollar continues to move with risk appetite after a series of negative data since the beginning of June. Today is a busy day in the US for economic releases with consumer confidence and the Federal Open Market Committee minutes for August released later tonight.

Elsewhere, the Bank of Japan has tried to address the recent appreciation of the Japanese yen by expanding its special loan programme. In Australia retail sales and building approvals both showed better than expected figures overnight.

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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