Sterling strengthened against $US on Friday

Published: 11 October, 2010

Sterling strengthened against the US dollar on Friday, coming close to the eight-month high hit the previous day.

Sterling strengthened against the US dollar on Friday, coming close to the eight-month high hit the previous day as US employment figures disappointed and UK producer inflation data helped investors regain confidence in the pound.

Currency Rates
EURO/GBP - 1.144
US$/GBP - 1.594
CHF/GBP - 1.534
CAN$/GBP - 1.613
AUS$/GBP - 1.620
ZAR/GBP - 10.969
JPY/GBP - 130.85
HKD/GBP - 12.369
NZD/GBP - 2.119
US$/EURO - 1.392
HUF/GBP - 313.89

Sterling also regained some ground against the euro after the strong data and also comments that the euro was too strong, but was held from going too far due to concerns over further Quantitative Easing. The economic calendar is relatively light today, with bank holidays in Canada and the USA. However, the most important events will be taking place in Washington, as Mervyn King and Bill Dudley (US Federal Reserve President) speak following the weekend's autumn meetings of the IMF and World Bank. As mentioned last week, currency devaluation and the threat of "currency wars" are key issues right now.

In the Euro zone, the euro fell against sterling on Friday after Eurogroup chairman Jean-Claude Juncker stated that the euro was too strong against both sterling and the US dollar. The euro has strengthened in recent months as the European Central Bank focuses on withdrawing emergency funding which contrasts sharply with the monetarily loose outlook of their US and UK equivalents. Data released today in the region is restricted to Italian and French industrial production.

In the USA, the US dollar lost ground again on Friday as it loses favour amongst global investors as many are now almost certain that the Federal Reserve will start pumping more money into the US economy in the next few weeks. Key Non-Farm Payroll figures showed that the US economy shed 95,000 jobs in the last month which saw the US dollar fall against major counterparts. With markets closed today and no clear resolution (so far) to the issue of "currency wars", the US currency has stayed relatively flat in early trading today.

Elsewhere, the New Zealand dollar slipped by 0.3% against major counterparts as Prime Minister John Key said that currency exchange rates were starting to cause concern for exporters. In addition, Australian home loans grew by 1% as expected in August.

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