Sterling falls and UK retail sales data shows drop on last year

Published: 07 September, 2011

Sterling fell to a two month low against the US dollar yesterday, and data from the British Retail Consortium showed a 0.6% drop in retail sales compared to this time last year.

Currency rates - September 7

EURO/GBP - 1.1356
US$/GBP - 1.5998

CHF/GBP - 1.3697

CAN$/GBP - 1.5845
AUS$/GBP - 1.5098
ZAR/GBP - 11.3745
JPY/GBP - 123.71
HKD/GBP - 12.4805

NZD/GBP - 1.9356
SEK/GBP - 10.2872
US$/EURO - 1.4076

Sterling also weakened against the euro, but gained by 8% against the Swiss franc after the Swiss Central bank imposed a ceiling on the franc in an effort to help their economy. The Bank of England (BoE) is due to meet tomorrow to discuss the future of UK interest rates - expectations are they will remain at a record low of 0.5%. There is a possibility of more quantitative easing measures given the state of the UK economy.

In the Euro zone, the euro rocketed against the Swiss franc by 9% after the Swiss central bank enforced a target rate of CHF1.20/€1. Euro zone GDP figures showed growth was down 2.4% from last year but grew marginally in the second quarter. Household consumption data also came in weaker than expected, falling for the first time in almost two years. This data has not helped the growing concerns over the Euro zone debt crisis.

The US dollar had a mixed day yesterday. It hit an eight week low versus the euro, but strengthened 9.1% against the Swiss franc. Despite better than expected figures from the US services sector for August, US stocks fell due to concerns that the European debt crisis is causing the global economy to slow down. Until the crisis comes to an end, there will be continuous turbulence in the currency market. Out today there are US Mortgage Application figures which if are better than expected, will indicate an increase in household income as well as possible economic growth.

Elsewhere, The Swiss National Bank sent shockwaves through the currency markets after imposing a minimum exchange rate on the Swiss franc. This drastic decision has not happened in more than three decades which shows the country's determination to keep the Swiss franc at a low and curb inflation. This caused great euro and sterling strength. Currency movements are becoming unpredictable so call in now for a live rate.

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. www.SmartWineSpirits.com

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