Sterling strengthens against commodity backed currencies

Published: 21 May, 2012

Sterling strengthened against the commodity backed currencies on Friday, but weakened off against the majority of others.

Currency rates - May 21

EURO/GBP - 1.2372

US$/GBP - 1.5803

CHF/GBP - 1.4861

CAN$/GBP - 1.6101

AUS$/GBP - 1.6061

ZAR/GBP - 13.109

JPY/GBP - 125.41

HKD/GBP - 12.2768

NZD/GBP - 2.0881

SEK/GBP - 11.261

AED/GBP - 5.8044

US$/EURO - 1.2773

INR/GBP - 86.35

This was after one of the members of the Monetary Policy Committee suggested that further Quantitative Easing could be required to prop up the UK economy. Revised GDP data this week will show if the UK economy is actually back in recession as many economists suspect the preliminary figures released were inaccurate. The Bank of England's inflation letter, Monetary Policy Committee meeting minutes and monthly retail sales data could cause a lot of volatility this week by providing insight into the state of the UK's economy.

The euro recovered against the majority of currencies on Friday despite the continued worry about a potential Greek exit. Manufacturing and services Purchasing Managers' Index (PMI) data is released this week; furthermore, business climate data from Germany showing the sentiment of manufacturers, builders, wholesalers and retailers will go some way to show the state of the euro economy which is extremely fragile at present.

The US dollar remained relatively strong on Friday compounded by the markets fear about the future of the euro. The Facebook stock market listing dominated the markets on Friday as the world looked to see if the largest ever internet listing could increase risk appetite in the global markets.

Elsewhere, the main data released on Friday was the Canadian Consumer Price Index (CPI) figures which showed a 0.4% rise in the change in the price of goods and services purchased by consumers. Inflation expectations and the annual budget for New Zealand is released this week, manufacturing PMI data from China, Canadian retail sales data and the official interest rate from Japan will also be announced.

http://www.youtube.com/watch?v=at1_TQv4EBI&feature=youtu.be

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