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Sterling rallies against euro

Published:  01 February, 2012

Sterling had a good day yesterday rallying throughout the afternoon against the euro to finish the day above the 1.20 level.

Sterling had a good day yesterday rallying throughout the afternoon against the euro to finish the day above the 1.20 level.

Currency rates - February 1

EURO/GBP - 1.2032

US$/GBP - 1.5728

CHF/GBP - 1.4501

CAN$/GBP - 1.5772
AUS$/GBP - 1.4827
ZAR/GBP - 12.2891
JPY/GBP - 119.89
HKD/GBP - 12.2031

NZD/GBP - 1.9084

SEK/GBP - 10.687

AED/GBP - 5.7749

US$/EURO - 1.3061

INR/GBP - 77.85

 

However, a record drop in consumer credit in the UK has led to many people believing that there could be another round of quantitative easing in February which could slow sterling's upward progress.

 

The Euro held its relative strength in the morning with the Greek Prime Minister stating that the country had made significant progress in the debt restructuring talks. The latest rumors suggest that a deal should be completed before the weekend. German unemployment data came in better than expected but overall the Euro zone's unemployment is now at its highest level since the euro was introduced. With weak German retail sales and French consumer spending, rumours of a second bailout in Portugal, the on-going problems surrounding Greece and bad economic data in the US the Euro weakened significantly in the afternoon against sterling and the US$ as risk aversion came to dominate the market.

 

 

In the US there was a raft of bad data out including U.S. consumer confidence declining in January well below the expected level reiterating the fact that although the US economy is moving forwards it is not going to be in a straight line and will be slower than anticipated. Out today we see the release of manufacturing and non-farm payrolls employment data.

 

 

Elsewhere, the Canadian dollar reacted poorly to weak GDP data and a higher than expected fall in the raw materials price index. Not helpful when your economy is reliant on commodity exports. Today we have the release of manufacturing data for China and retail sales data for Switzerland. The Swiss franc is approaching the €1.20/Chf1 level which is the exchange rate at which the Swiss National Bank has stated it will defend.

 


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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