Sterling slips from one month high against euro

Published: 11 May, 2011

Sterling slipped from a one month high against the euro and dropped against the US dollar yesterday as investors braced themselves for further losses ahead of today's Bank of England quarterly inflation report.

Currency rates May 11

EURO/GBP - 1.1367
US$/GBP - 1.6370
CHF/GBP - 1.4418
CAN$/GBP - 1.5652
AUS$/GBP - 1.5070
ZAR/GBP - 11.040
JPY/GBP - 132.26
HKD/GBP - 12.721
NZD/GBP - 2.059
SEK/GBP - 10.183
US$/EURO - 1.4397

The Bank is expected to forecast higher inflation in the short term, but importantly it is expected to revise its growth forecast for the UK economy downwards. The report is expected to outline the central bank's justification for keeping interest rates at an all time low and as such, this will keep sterling under pressure - especially against the euro. House prices fell at a slower rate and retail sales grew at the fastest pace for five years, but the outlook for the UK economy remained gloomy.

In the euro zone, the single currency had a volatile ride yesterday after fresh media reports (that were naturally later denied by the Greek government) suggested that Greek debt would be restructured as early as June. Analysts said that risks remain for the euro with relation to the sovereign debt crisis, and as such the next 'target' for sterling/ euro is at €1.1490/ £1.

In the USA, the media reports over a potential Greek restructuring saw the US dollar swing between gains and losses against the euro - losing as rumours circulated over the deal, but gaining when the reports were denied. Elsewhere, economic optimism figures came in better than expected and import prices crept up - positive news given this could boost inflation and see the Federal Reserve cut back on the current ultra-loose monetary policy.

Elsewhere, the Swiss franc fell against the US dollar as consumer price inflation figures showed that inflation slowed to 0.1% in April and year on year figures dipped to just 0.3%. This missed estimates by a long way and fuelled speculation that the Swiss economy is heading for deflation.

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