Smart Currency: Sterling sees a month low against Euro on Friday [07/03/2011]

Smart Currency: Sterling sees a month low against Euro on Friday [07/03/2011]

EURO/GBP – 1.1639
US$/GBP – 1.6290
CHF/GBP – 1.5072
CAN$/GBP – 1.5825
AUS$/GBP – 1.6052
ZAR/GBP – 11.2030
JPY/GBP – 133.65
HKD/GBP – 12.688
NZD/GBP – 2.2075
SEK/GBP – 10.328
US$/EURO – 1.3993

Sterling fell to a one month low on Friday against the euro as the single currency was boosted by comments from European Central Bank President Jean-Claude Trichet who said on Thursday that interest rates could rise as early as next month. Sterling held its ground against the US dollar above $1.62/£1 despite house price figures that showed that UK house prices fell at their fastest pace in over a year. Key data released this week includes retail sales and house prices overnight tonight, the UK trade balance on Wednesday and the Bank of England’s interest rate decision on Thursday. Interest rate speculation is yet again the name of the game this week so call in now to ensure you don’t lose out.

In the euro zone, the news this morning is that credit rating agency Moody’s has downgraded the credit rating of Greece even further – with a negative outlook for the future – citing uncertainty over the mammoth task facing the Greekl government. This has seen the euro fall off from close to $1.40/€1 against the US dollar that it hit towards the end of last week following talk of interest rate hikes. ECB President Trichet’s press conference today will be followed much more closely today as a result of his call for “strong vigilance” on inflation in the region. Call in now for a live exchange rate.

In the USA, despite positive non-farm payroll figures on Friday, markets were in reality a little disappointed after strong figures throughout the week. Either way, the Federal Reserve is being very loose with monetary policy and as a result the US dollar is unlikely to benefit from positive data in the same way as sterling has been of late. It is a relatively quiet week for data until the back end of the week, when there is unemployment data and retail sales.

Elsewhere, tensions in Libya have seen oil hit a 29 month high in the last few weeks and markets will be keeping a close eye on the situation there. The Swiss franc has been a major benefactor, but many feel it has been overbought and is set for a ‘correction’.

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