Sterling hits 7 week low vs US Dollar

Friday 25th November 2011
Good morning. Sterling hit a 7 week low against the US Dollar yesterday, as there have been no signs of progress on resolving the euro zone debt crisis. This prompted investors to shun riskier currencies such as Sterling. Debt problems in the euro zone along with the weakest German bond auction in more than a decade have also weakened the Euro, and at 08:30am this morning rates are as follows:

GBP/EUR 1.1641
GBP/USD 1.5481
GBP/AUD 1.5956
GBP/NZD 2.0870
GBP/CHF 1.4294
GBP/CAD 1.6223
GBP/ZAR 13.166
GBP/JPY 119.75
GBP/DKK 8.6545
GBP/NOK 9.1253
• EUR/USD 1.3296

UK Economy grows at 0.5%

UK economic growth between July and September was left unchanged in the latest figures from the Office for National Statistics. The Bank of England has forecast that the economy will stagnate in the next three months of this year, and is likely to grow at between 0.7-0.8% next year. The ONS said inventory growth added 0.7% to GDP in the third quarter.

BoE vote 9-0 for rate hold and QE

Earlier this week the Bank of England minutes showed the MPC were unanimous in their vote to keep interest rates on hold and not pursue any further Quantitative Easing. This has given some support for Sterling, however we do expect further QE at some point in the next few months.

Today’s Data

There are no significant economic releases today. On Monday, I will post a detailed summary of Sterling/Euro rates and Sterling/Dollar rates over the last week, and a list of economic data to watch for that could affect exchange rates.

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