Sterling remains steady against dollar

Published: 29 September, 2011

Sterling remained steady against the US dollar yesterday and was slightly down versus the euro.

Currency rates - September 29

EURO/GBP - 1.1474
US$/GBP - 1.5616

CHF/GBP - 1.4011

CAN$/GBP - 1.6118
AUS$/GBP - 1.5944
ZAR/GBP - 12.2687
JPY/GBP - 119.58
HKD/GBP - 12.1791

NZD/GBP -2.0055
SEK/GBP - 10.5988

US$/EURO - 1.3602

With increasing market rumours that Greece will hold off on a default, market players invested in riskier currencies. But the pound is likely to remain weak for some time due to expectations that the Bank of England will bring more quantitative easing to the table.

In the Euro zone, the euro rose 0.5% versus the US dollar and the pound. This was largely due to cautious optimism that the correct measures are now being taken to handle the debt. Yesterday, German Chancellor Angela Merkel announced she will wait for a progress report on before deciding on whether Germany will help fund a second bailout package. Germany is feeling the stresses of having to bailout financially weak countries, however, many feel Greece will meet targets and as a result, Germany will approve.

In the US, the US dollar weakened versus the euro due to a slight rise in risk appetite. The US dollar also made slim losses versus sterling. The latest economic data revealed US durable goods orders declined by 0.2% in August. This was mostly due to a decrease in demand for cars. Though it was in line with expectations, many are concerned that the US economy is not on a robust recovery, especially when housing and consumer confidence data is low.

Elsewhere, China allowed the yuan daily currency peg reference rate to strengthen to its highest level since July 2005. The country remains determined to regulate inflation by having a stronger currency and this will be seen as a positive move by the US who have been arguing for a stronger yuan for years.

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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