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Sterling kept range bound as BRC retail sales monitor drops

Sterling has been kept fairly range bound against the majority of currencies after the British Retail Consortium retail sales monitor dropped to -3.3%.

Currency rates - May 10

EURO/GBP - 1.2457

US$/GBP - 1.6143

CHF/GBP - 1.4965

CAN$/GBP - 1.6146

AUS$/GBP - 1.5964

ZAR/GBP - 12.86

JPY/GBP - 128.69

HKD/GBP - 12.5322

NZD/GBP - 2.0482

SEK/GBP - 11.1019

AED/GBP - 5.9279

US$/EURO - 1.2962

GBP/INR - 86.12

But it has hit fresh highs of 1.2460 against the euro today as fears that Greece could soon leave the euro, gripped the market. The Bank of England's rate decision is the biggest piece of news on the agenda today, with the interest rate and the asset purchase facility expected be kept unchanged; but, there is a slim chance that further quantitative easing could be implemented.

The euro fell to new lows against sterling and the US dollar as rumours circulated across the financial markets that the EU may withhold a Greek bailout payment due today; although, these rumours turned out to be unfounded. The German finance minister stated that it cannot force Greece to stay in the Eurozone if it does not want to causing further speculation that Greece could soon leave the Euro. Furthermore, a Greek government is still yet to be formed meaning another election in June seems ever more likely; in theory, this would mean Greece would fail to adhere to its bailout commitments and in turn default on its debt.

The US dollar was relatively strong again today, buoyed by its safe haven status with the Eurozone economic crisis entering a new phase. A busy day in the US includes trade balance figures, unemployment's claims and the Chairman of the Federal Bank is also speaking. The US is still expected to lead the global economy; as a result, all releases from the US are watched closely by investors.

Elsewhere, the Japanese yen was the stand out performer once more due to its safe haven status; whilst the commodity backed currencies struggled. A Swiss bond auction was well received offering much lower yields than the UK, the US and Europe, thus confirming its safe haven status amongst investors; we will have to see if the Swiss National Bank (SNB) can keep to its promise to uphold the €1.20/Chf1 peg which is under threat. Japanese current account and Australians unemployment figures were released late last night; whilst, Chinese and Canadian trade balance figures are also released today.

http://www.youtube.com/watch?v=jvVwnEDlyCs&feature=youtu.be