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Sterling recovers ground against euro

Published:  09 March, 2011

Sterling fell against the US dollar as investors sold off positions, but sterling did recover some ground against the euro as sovereign debt worries saw investors selling the euro.

Sterling fell against the US dollar as investors sold off positions, but sterling did recover some ground against the euro as sovereign debt worries saw investors selling the euro.

Currency rates

EURO/GBP - 1.1647

US$/GBP - 1.6148
CHF/GBP - 1.5076
CAN$/GBP - 1.5669
AUS$/GBP - 1.6009
ZAR/GBP - 11.1117
JPY/GBP - 133.78
HKD/GBP - 12.5816
NZD/GBP - 2.1835

SEK/GBP - 10.266
US$/EURO - 1.3863

UK data was also poor with a retail sales survey underperforming and a house price survey coming in below expectations. The Bank of England begins its monthly interest rate meeting today, with six members in favour of doing nothing and three in favour of an interest rate hike, there needs to be a two member swing to see anything happen. 

Despite expectations that the European Central Bank will look to raise interest rates as soon as next month, the euro suffered today as a result of widening bond spreads following the ratings downgrades in Spain and Greece over the last few days. Analysts expect the euro to remain strong in the short term on interest rate speculation, but fall off against sterling and US dollar as the debt crisis comes to the fore once again. Out today we have German industrial production figures.

In the USA, the US dollar took back some of the ground lost against the euro as investors contemplated what higher interest rates would mean for the euro zone with many countries already laden with high levels of debt. In addition, the ramifications of higher oil prices are a concern for many investors who feel that the current spike could push costs higher globally and see the world sink to a double dip recession.

Elsewhere, New Zealand's interest rate decision is due today with commentators sharply divided over what will happen. With uncertainty following the earthquake, many are calling for a 0.25% cut from the current 3% but there is likely to be no change. 

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.

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