3rd August 2010
Good morning. The pound rallied broadly yesterday, climbing against most major currencies. Today we’ll take a detailed look at why the pound is gaining against the Euro, and the forecast for August 2010. First the usual snapshot of rates as at 08:30am:
- GBP/EUR 1.2079
- GBP/USD 1.5921
- GBP/AUD 1.7514
- GBP/NZD 2.1773
- GBP/CAD 1.6317
- GBP/CHF 1.6549
- GBP/ZAR 11.649
- GBP/JPY 137.14
- GBP/NOK 9.515
- EUR/USD 1.3183
The pound has gained due to increased risk appetite, and also rising shares on the back of the news that HSBC made huge profits in the first half of 2010. Given the financial sector’s hefty contribution to the UK economy, the good news for the UK bank helped lift UK markets and also boosted Sterling significantly.
Weak US Dollar helping to boost rates
Sterling benefited as the dollar came under pressure on concerns the U.S. economy is losing steam after below-forecast growth data last week. This weakened the USD making it cheaper to purchase. Today rates are through $1.59 which is the best in 6 months.
So will rates now continue to climb?
It’s hard to say. On the one hand, a host of better UK data has helped the pound recover significantly in recent weeks. Sterling has been lifted by recent buoyant UK data, including stronger-than-expected second quarter economic growth. However there are some concerns this trend may not be sustainable given the government’s plans for harsh austerity measures.
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