Sterling strengthens slightly but remains under pressure

Published: 27 September, 2011

Sterling increased by 0.7% against the euro yesterday after demand increased due to concern over the European debt crisis.

Currency rates - September 27

EURO/GBP - 1.1498
US$/GBP - 1.5568

CHF/GBP - 1.4041

CAN$/GBP - 1.5965
AUS$/GBP - 1.5765
ZAR/GBP - 12.3641
JPY/GBP - 118.86
HKD/GBP - 12.1334

NZD/GBP - 1.9782
SEK/GBP - 10.5838

US$/EURO - 1.3536

It also strengthened by 0.7% versus the US dollar. Despite these glimpses of strength, the pound is still suffering from last weeks' one year low of $1.532/£1. However it remains under pressure - the prospect of more monetary easing is likely to weaken sterling, making it less appealing for investors.

In the Euro zone, the euro extended its losses against the US dollar after depreciating by 0.5%. The common currency also hit a decade low versus the yen. A key German Sentiment Survey came in higher than expected, but figures were still lower than last month and there is a slight worry that trading conditions may be slowing down. Whilst the euro made gains off this data, they were only temporary as there are severe concerns that it will not be enough to tackle the euro debt crisis.

In the US, the US dollar slipped 0.4% versus the yen and made slim gains against the euro. US new home sales data came in as expected but figures are still at a six month low. It has become evident that despite low mortgage rates, Americans are flocking towards renting or buying second hand homes which are much cheaper. These figures should not come as a surprise as homebuilder sentiment is also at record lows.

Elsewhere, the Canadian dollar depreciated by 0.8% to the US dollar. This is largely due to investors now seeking refuge in the greenback. The Swedish krona on the other hand was one of the best performers compared to other major currencies, strengthening 0.9% against the US dollar. The Norwegian krone also rose 0.8% against the greenback.

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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