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

Currency update, September 21: sterling falls to seven week low

Published:  21 September, 2010

Sterling fell to a seven week low against the euro yesterday after poor UK data highlighted a slow UK recovery.

Currency Rates
EURO/GBP - 1.186
US$/GBP - 1.551
CHF/GBP - 1.558
CAN$/GBP - 1.596
AUS$/GBP - 1.639
ZAR/GBP - 11.052
JPY/GBP - 132.56
HKD/GBP - 12.049
NZD/GBP - 2.131
US$/EURO - 1.308
HUF/GBP - 332.75

Data showed that lending to businesses dropped for the 5th consecutive month in July and mortgage approval data showed the lowest number of new mortgages in over a year. Figures also showed that monetary supply - or the amount of money in the economy - dropped by 0.2% in August. All of this led investors and analysts to question the UK's recovery further and saw renewed calls for an additional round of Quantitative Easing from the Bank of England to stimulate the economy. This saw sterling drop to €1.1887/£1 before recovering marginally to end the day above €1.19/£1. Against the US dollar, sterling slipped to a low of $1.5526/£1 despite holding firm above the $1.56/£1 level over the weekend. Out today, there is key public sector borrowing figures which are highly anticipated and will cause sterling movement.

In the Euro zone, there were no real data releases yesterday but there was positive news from Italy. The Italian trade deficit of €1.37bn showed a surplus of €1.75bn for last month. There were concerns last week over the debt crisis in Europe, as rumours spread that Ireland was seeking help from the International Monetary Fund (IMF). The Irish government quickly denied these rumours but the euro lost nearly a cent against the US dollar. Yesterday however, the euro recovered ground against the US dollar as markets grew concerned that the Federal Reserve would start a fresh round of emergency stimulus.

In the USA, the US dollar has been under further significant pressure yesterday ahead of today's Federal Reserve interest rate decision. Concerns that a further round of emergency stimulus will be pumped into the economy saw gold reach a record high - testament to the level of uncertainty and concern that is prevalent in the marketplace. Aside from the interest rate decision, today sees new build housing data and building permits figures.

Elsewhere, the Australian dollar continued to surge higher yesterday to hit a 2 year high against the US dollar after Glenn Stevens of the Reserve Bank of Australia stated that economic growth down under is likely to be "above trend" in 2011. This saw interest rate expectations surge with one gauge giving a 29% chance of an interest rate rise at the next meeting. The Japanese yen remained in a tight trading range after intervention from the Japanese government last week saw investors steer relatively clear of the currency.

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.

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.