Currency Rates

EURO/GBP - 1.147
US$/GBP - 1.570
CHF/GBP - 1.686
CAN$/GBP - 1.687
AUS$/GBP - 1.817

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The Bank of England Monetary Policy Committee kept interest rates on hold at 0.5% and decided to pause the level of emergency funding at £200bn. The Bank has reserved the right to add more money into the economy if the economic situation requires it. Sterling strengthened marginally against the euro which suggests the market was concerned that the bank might add more money into the economy. It is likely that the decision was close – we shall see how close when the minutes are released later in the month. Today in the UK we have Producer Price Index data for January which is expected to show little change. The main focus today is US unemployment data – speculation as to the figures have already caused a spike in volatility overnight, especially with sterling against the US dollar. Call in today if you have pending transfers, as sterling is losing ground against the US dollar rapidly.

In the Euro zone, the ECB kept rates on hold and made no promises as to a concrete timeline for withdrawal of monetary stimulus going forward. President Trichet made it clear that he felt Greece’s plans to sort their deficit would work – however the market didn’t share his optimism. Premiums for the debt of Spain, Portugal and Greece soared and the largest union in Greece approved a second mass strike – hardly likely to help boost the economy. If you are moving euros back into sterling, the outlook suggests that sterling is likely to strengthen against euro. Speak to a trader today to avoid losing out.

Overnight, the US dollar has surged against major currencies as investors poured back into the currency as risk aversion reappeared. This was triggered when Asian stock exchanges plunged following a sell off. The sell off was prompted by concerns that today’s Non Farm Payroll data will disappoint and raise concerns over the true strength of the US recovery. Perversely, we are in a situation where the US dollar seems to strengthen on positive news (as it becomes an attractive asset) and on negative news (as the US dollar is a ‘safe’ asset) – either way if you have payments to make in US dollars, sterling seems to continue to weaken. Speak to a trader today to avoid missing out.

In Australia, data showed that construction in the country expanded at the fastest pace for 2 years. However, the market discounted this as being caused by the stimulus over the last 18 months. The Australian central bank also raised its outlook for interest rates.

Call 0808 163 0102 or +44 (0) 207 898 0541 from outside the UKor fill out our quote form: http://www.smartcurrencyexchange.com/quote.aspx