UK disposable income falls to 1921 low

Published: 30 March, 2012

Sterling has had a turbulent week, alongside data showing the UK's disposable income has fallen to its lowest level since 1921.

Sterling has had a turbulent week, alongside data showing the UK's disposable income has fallen to its lowest level since 1921.

Currency rates - March 30

EURO/GBP - 1.1981

US$/GBP - 1.6017

CHF/GBP - 1.4447

CAN$/GBP - 1.5972

AUS$/GBP - 1.5395

ZAR/GBP - 12.334

JPY/GBP - 131.64

HKD/GBP - 12.4402

NZD/GBP - 1.9526

SEK/GBP - 10.605

AED/GBP - 5.8862

US$/EURO - 1.3364

INR/GBP - 81.92

Sterling hit a four and half month high against the US dollar and a two week low against the euro before trends reversed towards the back end of the week. The annual and fourth quarter GDP figures for 2011 were both unexpectedly revised down this week.

The euro had a poor end of the week as Standard and Poor's (one of the three biggest credit rating agency) suggested that Greece may need its debt restructuring again; furthermore, one of the members of the ECB stated his belief that Portugal may need more European aid. On a more positive note, German unemployment fell more than anticipated; but, this did little to increase the sentiment from the Eurozone as the majority of countries struggle to produce any positive data. The market will look to decipher the budget cuts announcements that are expected from Spain today with the 24 hour general strike in full flow.

The US dollar had poor start to the week; but, strengthened against the majority of currencies as the week progressed. Announcements this week suggested that the Federal Reserve Bank would look to keep monetary policy loose for the time being. A string of bad data was released this week as core and headline durable goods orders rose by less than markets had predicted, weak house sales data were revealed and unexpectedly poor labour data showed that the number of individuals who filed for unemployment insurance had risen.

Elsewhere, the Australian dollar, New Zealand dollar and South African all had a poor week, whilst the Japanese yen changed from being particularly weak against the majority of currencies before strengthening mid-way through the week as the markets risk appetite changed. The most notable news was that the Chinese yuan strengthened to a record high against the US dollar following the Chinese president stating that he will look to "let the market play a greater role" in determining the yuan's strength.

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