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

Sterling slips against US dollar

Published:  28 October, 2010

Sterling slipped back against the US dollar on Wednesday after investors pulled out of bets against the US currency.

Sterling slipped back against the US dollar on Wednesday after investors pulled out of bets against the US currency on uncertainty over the level of additional Quantitative Easing being added to the US economy by the Federal Reserve.

Currency Rates
EURO/GBP - 1.140
US$/GBP - 1.578
CHF/GBP - 1.556
CAN$/GBP - 1.617
AUS$/GBP - 1.616
ZAR/GBP - 11.147
JPY/GBP - 128.34
HKD/GBP - 12.242
NZD/GBP - 2.105
SEK/GBP - 10.611
US$/EURO - 1.383
HUF/GBP - 309.29

However, sterling held firm above the €1.14/£1 hitting a high of €1.1475/£1 on the day. Sterling has enjoyed a bumper two days after stronger than expected GDP data on Tuesday and a vote of confidence in the UK economy from Standard and Poors credit rating agency that upgraded the outlook for the UK's 'AAA' credit rating from 'negative' to 'stable', citing the government's spending review as evidence of the level of commitment to cutting the deficit. Yesterday saw Bank of England deputy governor Charlie Bean state that the figures this week had been surprisingly strong. Overall, the threat of further QE in the UK has been minimised, but not eliminated.

In the Euro zone, German inflation data came in as expected and French consumer spending jumped by 3% on last month. There was data released that showed more banks had taken up three month loans from the European Central Bank in the last period, but this was explained by it being cheaper to borrow from the ECB rather than any form of worsening of credit conditions in the region. The euro saw a similar response to sterling, slipping against a stronger US dollar on doubts over the level of Fed stimulus.

In the USA, the US dollar had a relatively strong day against most currencies aside from sterling, as investors await next week's Federal Reserve meeting in which the Fed is expected to announce additional Quantitative Easing measures to help stimulate the US economy. An article in the Wall Street Journal stated that officials were keen to avoid a "shock and awe" approach and instead feed funding into the market gradually. This cast doubts over whether extreme bets against the US dollar were justified, and investors bought back into the US dollar.

Elsewhere, the Australian dollar fell against major currencies after 3rd Quarter inflation figures fell, leaving the annual rate of inflation at 2.8%. This weighed heavily on the probability of future interest rate hikes.

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 quote or to download the Smart Wine and Spirit report. Alternatively call Smart on 0207 898 0500.