Sterling recovers against dollar, but UK hits retail low

Published: 29 November, 2011

Sterling recovered from a seven week low against the US dollar on Monday as risk appetite improved across global markets.

Currency rates - November 29

EURO/GBP - 1.1621

US$/GBP - 1.5490

CHF/GBP - 1.4291

CAN$/GBP - 1.6035
AUS$/GBP - 1.5594
ZAR/GBP - 12.9468
JPY/GBP - 120.84
HKD/GBP - 12.0810

NZD/GBP - 2.0488

SEK/GBP - 10.7714

AED/GBP - 5.708

US$/EURO - 1.3342

Reports that the IMF was preparing an aid package for Italy saw a surge in demand for risk related assets. However, poor data from the UK put investor expectations of a recovery off course. Retail sales figures came in very low, showing a fall at the highest rate for two-and-a-half years as consumers cut back spending. In addition, a report by the OECD stated that the UK will slip back into recession next year and that the Bank of England should increase the level of Quantitative Easing to £400bn.

The euro recovered from seven week lows against the US dollar as there was fresh hope of progress in the euro zone crisis. In addition, with a European Summit next week and a European Finance Ministers meeting later today, many hoped to see progress towards more decisive action.

In the USA, risk appetite was helped by reports of strong retail sales on "Black Friday" - the traditional post-Thanksgiving day of retail discounting similar to Boxing Day in the UK. In addition, there were reports that yesterday - dubbed "Cyber Monday" - would see record levels of online shopping ahead of Christmas, which helped investors feel marginally better and saw the US dollar slip off.

Elsewhere, the Australian dollar jumped by more than 2% against the euro, hitting a one week high and the New Zealand dollar gained by 2% as investors felt better that a solution to the Europe crisis was on the way.

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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