STERLING dropped against the US dollar yesterday, coming off a six-week high of $1.6001/£1 as uncertainty over the European debt crisis put pressure on ‘riskier’ currencies.
The poor appetite for risk and lack of any positive UK data meant that investors took profits from sterling’s earlier rally. With the UK exposed to the euro region, investors were increasingly negative over the pound’s prospects in the event that Wednesday’s announcement over the European debt crisis fails to deliver an effective solution. Out today we have UK current account data so call in now for a live exchange rate to ensure that you don’t lose out.
In the euro zone, the euro gained against the US dollar for most of the day as markets became cautiously optimistic about Wednesday’s announcement despite rumours of political bickering over the weekend and disagreement over several key parts of the package. Aside from the obvious focus on the debt crisis, there was mixed purchasing manager data from across the region which further added to the gloomy picture of European recovery. Call in now for a live exchange rate as there is likely to be further volatility surrounding Wednesday’s announcement.
In the USA, the US dollar was driven by risk appetite yesterday with US stocks performing well after positive earnings figures and a number of potential merger deals. The US dollar regained some of the ground lost earlier to the euro as doubts emerged surrounding the debt crisis package, however there was also some profit taking. Better than expected Chinese data helped ease concerns that the country’s economy was faltering and with many investors pinning their hopes on China to drive the global recovery this certainly helped.
Elsewhere, Japanese officials said that a strong yen was causing concern. Officials stated that the central bank would take action to curb excessive trading and speculative movements of the currency.
EURO/GBP – 1.1479
US$/GBP – 1.5956
CHF/GBP – 1.4114
CAN$/GBP – 1.6023
AUS$/GBP – 1.5295
ZAR/GBP – 12.6122
JPY/GBP – 121.58
HKD/GBP – 12.4186
NZD/GBP – 1.9872
SEK/GBP – 10.4772
AED/GBP – 5.866
US$/EURO – 1.3878
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