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

Sterling drops to fresh one month low

Published:  07 June, 2011

Sterling dropped to a fresh one month low yesterday against the euro, dipping below €1.1190/£1 as the euro zone shrugged off concerns over Greek debt and the IMF raised the prospect of further quantitative easing in the UK.

Currency rates, June 7:

EURO/GBP - 1.1179
US$/GBP - 1.6370
CHF/GBP - 1.3652
CAN$/GBP - 1.6004
AUS$/GBP - 1.5315
ZAR/GBP - 11.065
JPY/GBP - 131.38
HKD/GBP - 12.732
NZD/GBP - 2.0006
SEK/GBP - 10.063
US$/EURO - 1.4644

Whilst the IMF backed the UK government's plans to reduce the budget deficit on Monday, it said that tax cuts or more quantitative easing could be needed if growth proves persistently weak. The UK economy is likely to grow by around 1.5% in 2011 before achieving growth of about 2.5% in the medium term according to the IMF.

In the euro zone, the euro hovered near a one-month high against the US dollar and sterling on Monday as investor sentiment towards Greece improved as policymakers edged closer to agreeing a new aid package - expected to be in the region of €100bn. In addition, as the focus moves away from Greece, investors have eyed this week's ECB interest rate decision on Thursday in which the central bank is expected to signal another rate hike in July.

In the USA, it was a relatively quiet day with investor focus falling elsewhere. However, the impact of Friday's woeful Non-Farm payroll figures caused a bit of a stir, with the US dollar stuck near a one-month low against a basket of currencies on the view that US interest rates will stay low for longer. In addition, Philadelphia Fed Chairman Charles Plosser made his thoughts clear in a statement outlining that he expected US monetary policy to tighten towards the end of the year and that Friday's figures made no impact on his view. Fed Chairman Ben Bernanke speaks later today.

Elsewhere, the Canadian dollar traded near a two-month low versus the US dollar after last week's poor US data sparked concern that the recovery of Canada's biggest trade partner is faltering.

Smart Currency Exchange is a currency partner to Harpers Wine & Spirit. Harpers Wine & 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.