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Sterling hits yearly low against dollar

Published:  05 October, 2011

Sterling fell towards the lowest level against the US dollar for over a year yesterday, as construction data revealed the worst figures for 10 months.

Sterling fell towards the lowest level against the US dollar for over a year yesterday, as construction data revealed the worst figures for 10 months.

Currency rates - October 5

EURO/GBP - 1.1578
US$/GBP
- 1.5432

CHF/GBP - 1.4220

CAN$/GBP - 1.6253
AUS$/GBP
- 1.6141
ZAR/GBP
- 12.5478
JPY/GBP
- 118.41
HKD/GBP
- 12.0182

NZD/GBP - 2.0254
SEK/GBP
- 10.5872

US$/EURO - 1.3322


Any negative data has impacted on sterling as it reinforces the case for a further round of
Quantitative Easing. The Bank of England meets on Thursday and could conceivably pump further liquidity into the UK to provide a boost to growth. On a positive note, sterling hit a high of €1.1717/£1 earlier in the day as euro zone leaders failed to quell concerns over the sovereign debt crisis, but fell off as risk aversion reversed later in the day.

In the euro zone, after a poor initial start to the day, the single currency made large gains against both the US dollar and sterling as US Federal Reserve Chairman Ben Bernanke pledged that the Fed would support the economy, increasing bets that the US would launch a further round of QE. In addition, European leaders delayed a decision on Greece's next tranche of bailout funds. The vote was originally planned for yesterday, but has been delayed twice.

In the USA, Federal Bank chairman, Ben Bernanke's comments gave a large boost to risk appetite, as he stated that the Fed would be prepared to take strong action to help promote a stronger recovery. It gave markets confidence that the Fed did in fact have further options available, despite already having completed two rounds of Quantitative Easing.

Elsewhere, the Swiss franc fell against the US dollar and euro, with the US dollar hitting the highest level for 6 months on rumours that the Swiss National Bank would amend the recent currency exchange rate to weaken the franc further.


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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