Sterling regains ground against euro

Published: 25 January, 2012

Sterling regained ground against the euro yesterday after hitting a four week low against the single currency.

Currency Rates - January 18

EURO/GBP - 1.1948

US$/GBP - 1.5570

CHF/GBP - 1.4461

CAN$/GBP - 1.5752
AUS$/GBP - 1.4809
ZAR/GBP - 12.3520
JPY/GBP - 121.41
HKD/GBP - 12.0852

NZD/GBP - 1.9195

SEK/GBP - 10.5490

AED/GBP - 5.7290

US$/EURO - 1.3026

INR/GBP - 77.94

However the pound struggled to make many gains as investors became concerned over further economic weakness in the UK. In a speech last night, Bank of England governor Mervyn King hinted at a further round of Quantitative Easing. Today sees the minutes from last month's meeting which are expected to elaborate on this position. We also have the first estimate GDP figures for the fourth quarter of 2011, which are expected to show a contraction of the UK economy in the last three months of the year.

The euro remained quite resilient yesterday helped by better PMI figures on economic activity. In addition, markets shook off the news that the Greek 'PSI' deal would be delayed further after Euro zone Finance Ministers rejected the current proposal after insisting that interest payments on the re-negotiated bonds should now be below 4%. The deadline for a new agreement has now been pushed back to February 13.

In the USA, risk appetite has jumped overnight in Asian markets on the news late last night that iPhone maker Apple had reported a 73% rise in quarterly revenue, which saw shares in the company surge by 9% in after hours trading on the NASDAQ. Later on this evening, the focus shifts to the Federal Reserve and the FOMC interest rate meeting. This will be the first time that individual interest rate forecasts will be published.

Elsewhere, the Royal Bank of New Zealand is likely to keep interest rates on hold at today's meeting.

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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