Sterling regains ground against dollar

Published: 21 September, 2011

Sterling was up 0.1% versus the US dollar yesterday regaining ground from Monday's eight month low of $1.563/£1.

Currency rates - September 21

EURO/GBP - 1.1461
US$/GBP - 1.5690

CHF/GBP - 1.4052

CAN$/GBP - 1.5591
AUS$/GBP - 1.5265
ZAR/GBP - 12.1055
JPY/GBP - 119.81
HKD/GBP - 12.2264

NZD/GBP - 1.9076
SEK/GBP - 10.4054
US$/EURO - 1.3686

This increase was largely due to a slight rise in risk appetite. Against the euro however, the pound was flat and hit a day low of €1.144/£1.

After rating agency S&P downgraded Italy, the euro fell slightly against the US dollar. Weak German data did not help the single currency either. German investor sentiment fell to its lowest in three years whilst German producer price index dropped 0.3%. On a more positive note, Greece declared that it has paid off two bond coupons worth 769 million euros, but its ability to meet targets is still present.

The US dollar was up against the euro but slipped 0.1% versus a currency basket. Housing data out yesterday showed an unexpected 3.2% rise in building permits for the month of August, reaching the highest level since January 2011. Many are waiting for the today's announcement by Federal Reserve officials which may signal a third round of quantitative easing to decrease unemployment in the US. If this measure were to be put in place, it would without a doubt dilute the value of the US dollar.

Elsewhere, the safe haven Swiss franc weakened by 0.5% against the euro and 0.7% to the US dollar. This is likely to be due to market rumours that the Swiss National Bank may increase its previous euro intervention of €1.20 to €1.25. The Australian dollar also regained ground yesterday as global stocks rebounded in addition to commodities.

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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