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Sterling makes gains against dollar

Published:  31 October, 2011

Sterling gained against the US dollar on Friday afternoon in the wake of increased risk appetite following on from last week's EU summit.

Sterling gained against the US dollar on Friday afternoon in the wake of increased risk appetite following on from last week's EU summit.

Currency rates - October 31

EURO/GBP - 1.1428

US$/GBP - 1.6022

CHF/GBP - 1.3948

CAN$/GBP - 1.6012
AUS$/GBP
- 1.5181
ZAR/GBP
- 12.5240
JPY/GBP
- 126.68
HKD/GBP
- 12.4589

NZD/GBP - 1.9714
SEK/GBP
- 10.3292

AED/GBP - 5.888

US$/EURO - 1.4020


The announcement that bondholders would take a 50% cut and that the EFSF would be boosted was given a positive endorsement by the markets, yet there are still further risks to come. The week ahead in the UK will see growth come back under the spotlight. Business surveys and the first estimate of 3rd Quarter GDP are expected to point towards to a weakening outlook, but last week saw improving figures on public finances which validates the coalition's austerity measures. 

In the euro zone, the big news of last week was the EU summit which - after being postponed - delivered on its main goals; agreement from bondholders on a 50% 'haircut' to repayment amounts and an expansion of the EFSF. However, with little detail announced over the implementation of these measures, some analysts remain anxious.

In the USA, last week saw solid 3rd Quarter GDP growth figures and the coming week is expected to show improving manufacturing surveys. We also have the Federal Reserve's monthly meeting and while no changes to monetary policy are expected, the meeting will give a good assessment of the Fed's stance on the current outlook/ risks facing the US recovery.

Elsewhere, the Japanese government intervened over the weekend to weaken its currency after it hit a post-war high against the US dollar. The moves saw the currency weaken by as much as 5% as authorities moved in to prevent Japanese goods from being prohibitively expensive.



Supplied by Nick Ryder of Smart Currency Exchange, the currency partner to Harpers Wine and Spirit who have teamed up with Smart to provide readers with a free bespoke currency service
Go to www.smartcurrencybusiness.com/winespirit for more information or call on 0207 898 0500. 

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