EURO/GBP - 1.195
US$/GBP – 1.470
CHF/GBP – 1.691
CAN$/GBP - 1.521
AUS$/GBP – 1.727

Sterling fell against the US dollar after the boost provided by the collapse of Prudential’s bid to purchase the Asian arm of AIG subsided throughout the day. Once Prudential’s anticipatory billion dollar positions were cancelled, there was little further demand for sterling and the focus switched back to general risk sentiment. With little new political or economic news, the pound fell by around 0.4% at one point in the afternoon from a high of $1.4770/ £1 before stabilising later on in the afternoon. After a bright start against the euro (hitting 1.2073/ £1 at one point) the pound slipped off, but remained above 1.19/ £1. Data out today showed that mortgage approvals slightly more than expected and lending fell for the first time since November. Out later today we have Halifax house price data and also service sector data which can have a large effect on the price. Get in touch now to avoid missing out.

In the Euro zone, the euro strengthened marginally against sterling to close at 1.1970/ £1 and finished around where it started against the US dollar at $1.22/ 1. In terms of data, there was inflation data that showed producer prices had increased by 0.9% versus an expected level of 0.7%. The region is still suffering heavily from poor sentiment, so today’s release of retail sales data and PMI data is unlikely to have much effect. Having now hit 1.20/ £1, many analysts are now expecting the euro to fall to 1.25/ £1. Get in touch now for a price.

In the USA, pending home sales data jumped unexpectedly to 6% against an expected rise of 4.9%. As a result, this helped strengthen the US dollar against most currencies alongside a move to slightly safer assets as risk aversion returned to global investors. Out today, there is important unemployment data which is expected to show that the US economy gained around 68,000 jobs in the last month. Call in now for a price as there is still considerable volatility.

Elsewhere, Australia posted the first trade surplus in a year (exporting more than it imported) as high Chinese demand related to industrial production saw sales of metal and mineral ore surge by 25%. However, the outlook maybe a little more dull, as China tries to curb economic growth to avoid asset bubbles. The Australian bank chief hinted that China’s need to stem growth was a major reason behind the decision to keep Australian interest rates on hold – signalling an end to the programme of rate hikes. Get in touch now for a live exchange rate.

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