Sterling hits low after Lloyds Banking Group warns of losses

Published: 20 December, 2010

Sterling hit a three month low against the US dollar on Friday after Lloyds Banking Group warned that it was making further provisions for losses on Irish debt that it is exposed to.

Smart Currency daily rates

EURO/GBP - 1.1821

US$/GBP - 1.5551
CHF/GBP - 1.5032
CAN$/GBP - 1.5742
AUS$/GBP - 1.5710
ZAR/GBP - 10.704
JPY/GBP - 130.289
HKD/GBP - 12.098
NZD/GBP - 2.1009
SEK/GBP - 10.673
US$/EURO - 1.3153

Sterling hit a 3 month low against the US dollar on Friday after Lloyds Banking Group warned that it was making further provisions for losses on Irish debt that it is exposed to. This exacerbated concerns over the UK's exposure to Ireland's debt crisis and saw investors selling sterling. UK consumer confidence figures were much worse than expected, showing the lowest figures since the depths of the recession and giving an idea of the worries felt ahead of the impact of the government's spending cuts. Coming into the Christmas week, economic releases are few and far between with the only real data of interest being the Bank of England's meeting minutes from the last interest rate policy meeting on Wednesday.

In the euro zone, the euro strengthened against sterling on Friday after particularly strong German business sentiment data contrasted with the poor UK data that was released. The calendar is very thin this week with no data releases of real note aside from some European consumer confidence and German Producer inflation data - both released today. The Irish debt crisis is still causing issues and with lower trading volumes expected over the next few days there is scope for quite sharp moves on the currency markets.

In the USA, stronger than expected data at the back end of last week kept the upward pressure on for the US dollar as manufacturing and industrial production figures bucked expectations. Again, it is a very quiet week for data releases in the run up to Christmas and the week after will be no different. One thing to look out for though is sharp moves in the exchange rate as a result of low volumes of trade.

Elsewhere, this week sees interest rate policy meetings in both Poland and Korea - both of which are expected to keep rates on hold. Get in touch whilst it is quiet to discuss next year's currency requirements and discuss how Smart Currency can help manage your exchange rate risks.

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: www.SmartWineSpirits.com to get a FREE no obligation quote or to download the Smart Wine and Spirit report. Alternatively call Smart on 0207 898 0500.

Printer friendly version