EURO\/GBP – 1.1783
US$\/GBP \u2013 1.6070
CHF\/GBP \u2013 1.5489
CAN$\/GBP – 1.5981
AUS$\/GBP \u2013 1.5878
ZAR\/GBP \u2013 11.5970
JPY\/GBP \u2013 132.50
HKD\/GBP \u2013 12.5170
NZD\/GBP \u2013 2.0834
SEK\/GBP \u2013 10.3488
US$\/EURO – 1.3636<\/p>\n
Like yesterday, limited UK economic data led to a steady day for sterling against most other currencies. The UK government has increased the levy to be raised on the banks to \u00a32.5 billion. This hasn\u2019t gone down well with the banks. The market is waiting for the Bank of England meeting tomorrow and any shock announcements on interest rates. So volatility could increase in the run up to mid-day tomorrow.<\/p>\n
In the Euro zone German industrial production for December came in below expectations. So it isn\u2019t just the UK that caught a cold from December\u2019s bad weather. But just like here the German economy continues to grow and the underlying strength of Germany\u2019s industrial sector should never be underestimated.<\/p>\n
Yields on US treasury bonds continue to rise. This is lending some support to the US$ in the short term although the response to the US$32 billion issuance of three year debt was disappointing. I suspect the market sees further increases in US debt yields.<\/p>\n
China increased interest rates for the second time in six weeks. Inflation would seem to be key and something the Chinese authorities are keen to get on top of. One of the problems is that by keeping their currency artificially low they are beginning to see the cost of their imports grow significantly. Initially the Australian, Canadian and New Zealand dollars lose ground but this was soon reversed.<\/p>\n