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Sterling holds firm against euro, but weakens against dollar

Sterling held its own against the euro and the commodity backed currencies yesterday.

Currency rates - June 26

EURO/GBP - 1.2448
US$/GBP - 1.5582
CHF/GBP - 1.4962
CAN$/GBP - 1.6022
AUS$/GBP - 1.5548
ZAR/GBP - 13.1741
JPY/GBP - 124.24
HKD/GBP - 12.0926
NZD/GBP - 1.9748
SEK/GBP - 10.9912
AED/GBP - 5.7240
US$/EURO - 1.2508
INR/GBP - 88.97

However, it weakened slightly against the US dollar and Japanese yen as risk aversion drove the market. Public sector net borrowing figures and the Bank of England's inflation report hearing will be the main news on the UK's economic calendar today.

The euro traded in a similar fashion to sterling yesterday holding its own the commodity back currencies, but, was weak against the US dollar and the Japanese yen. Spain officially announced that it was requesting a bailout for its banking sector yesterday; however, the amount has yet to be specified which caused Spanish bond yields to push higher. Cyprus also announced that it will seek a bailout to aid its failing economy; but, again no specifics surrounding the amount have been revealed. More bad news came as the Greek finance minister resigned just four days into the job due to health issues; causing issues for the newly formed coalition government as they seek to renegotiate the terms of their bailout package. German consumer climate data is the only news of note today with the markets tentative before the EU economic summit on Thursday and news from Spain and Greece shifting the markets sentiment.

The US dollar performed well yesterday due to investors looking for a safer haven to lodge their money as risk aversion dominated the market. New home sales data released yesterday was positive, posting a much better than expected value and was the only significant data released globally.

Elsewhere, the Japanese yen was one of the stand out performers yesterday strengthening due to its safe haven status; whilst the commodity backed currencies were particularly weak. The Indian rupee also performed fairly well due to its central bank increasing the amount of rupee-denominated government bonds that can be owned by overseas investors by US$5 billion after weakening to historic lows against a range of currencies last week.

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http://www.youtube.com/watch?v=TjCjMonFH5I&feature=youtu.be