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Sterling strengthens against ailing euro

Published:  27 June, 2012

Sterling strengthened against the euro, which was one of the worst performing currencies yesterday as fears surrounding Spain intensified.

Sterling strengthened against the euro, which was one of the worst performing currencies yesterday as fears surrounding Spain intensified.

Currency rates - June 27

EURO/GBP - 1.2506
US$/GBP -
1.5630
CHF/GBP -
1.5026
CAN$/GBP -
1.6024
AUS$/GBP -
1.5548
ZAR/GBP -
13.1824
JPY/GBP -
124.31
HKD/GBP -
12.1234
NZD/GBP -
1.9792
SEK/GBP -
11.0421
AED/GBP -
5.7389
US$/EURO -
1.2486
INR/GBP -
89.39



 

However, sterling remained fairly range bound against the majority of other currencies as public sector borrowing figures were worse than expected. The Bank of England's inflation report hearing suggested all members of the Monetary Policy Committee shared the same sentiment; that monetary policy should be kept loose. The question of how loose it should be kept varied between individual members. The minutes of the Bank of England's last meeting showed a 5-4 vote to keep quantitative easing unchanged in June. We will have to wait and see if the members vote to inject more money into the economy in July. The only news of note today is mortgage approval data and the Confederation of British Industry (CBI) realised sales figures.

 


In the eurozone, Italy also sold bonds yesterday; but, similarly to Spain these auctions ended with much higher yields than previous. German Chancellor Merkel reiterated her stance that she would not be willing to accept the idea of euro bonds which also weakened the single currency further. German preliminary inflation data is the main news on the agenda today; but, the markets will pay much closer attention to the developments in Spain and any announcements in the run up to the EU Economic summit later this week. Clearly the EU Economic summit is going to be very key for the euro as markets expect it to result in a commitment to greater unity; fiscal, banking and economic.

 


The US dollar had a mixed day yesterday with the worlds focus on the developments in Europe and as data released showed that US consumer confidence had missed expectations. The main news on the US economic calendar today will be the core durable goods orders with the hope they s how an improvement from the disappointing March and April figures and the number of pending homes sales.

 



Elsewhere, the Japanese yen was one of the best performing currencies after the lower house of Japanese parliament passed a bill to double the consumption tax which has been outlined as a way to tackle part of the economic deficit. Trade balance data from New Zealand was released late last night; but, very little other data is released today as the markets look elsewhere for influence.

 

 

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http://www.youtube.com/watch?v=TjCjMonFH5I&feature=youtu.be