Sterling\u00a0had a strong day on Friday, closing above 1.20 against the euro after the biggest weekly gain against the single currency since mid-November 2010.\u00a0Sterling\u00a0benefitted from heavy selling of the euro as concerns over the debt crisis increased. After weaker than expected services and construction data earlier in the week, sterling took advantage as borrowing costs for Portugal, Spain and Italy went up ahead of an important week for European Government borrowing. It is a quiet start for data in the\u00a0UK\u00a0this week before the Bank of England\u2019s interest rate meeting on Thursday. Whilst inflation is still stubbornly high and markets are expecting an interest rate hike at some point, this is unlikely to happen this week as the Bank will probably wait and see what impact the VAT increase and spending cuts has before changing current policy. Speak to one of the traders today about your upcoming payments.<\/p>\n
In the Euro zone, a large sell off of European \u2018periphery\u2019 bonds, an EU proposal on lending and poor German retail sales data saw the euro slump to a 4 month low against the US dollar and drop below 1.20\/ \u00a31 against sterling. The EU proposal outlined plans to force those who lend to banks to accept losses should the banks fail and insurance against default for Spanish and Portuguese neared record highs. Analysts said there is scope for further euro losses this week so call in now for a live exchange rate \u2013 especially as the news overnight is that\u00a0Portugal\u00a0is now under pressure to accept a bailout.<\/p>\n
In the\u00a0USA, following better than expected private jobs figures on Wednesday, there were expectations of big numbers on the Non-Farm payroll data. However, this failed to materialise but 103,000 new jobs were added and the unemployment level fell to 9.4%. The US dollar fell marginally against sterling. Out this week, there is further unemployment data on Thursday so call in now.<\/p>\n
Elsewhere, it seems that investors have finally woken up to the realisation that the Australian economy is not an invincible bastion to keep throwing money at. The worst flood in half a century and active efforts by\u00a0China\u00a0to curb growth mean that\u00a0Australia\u2019s export of commodities is likely to suffer. There are employment figures released this week which could come in worse than expected and kick start the Aussie dollar on a downward spiral.<\/p>\n
EURO\/GBP<\/strong> – 1.2028<\/span><\/p>\n US$\/GBP<\/strong> \u2013 1.5508<\/span><\/p>\n CHF\/GBP<\/strong> \u2013 1.4963<\/span><\/p>\n CAN$\/GBP<\/strong> – 1.5443<\/span><\/p>\n AUS$\/GBP<\/strong> \u2013 1.5637<\/span><\/p>\n ZAR\/GBP<\/strong> \u2013 10.6130<\/span><\/p>\n JPY\/GBP<\/strong> \u2013 128.98<\/span><\/p>\n HKD\/GBP<\/strong> \u2013 12.059<\/span><\/p>\n