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Currency update June 10: pound likely to remain under pressure

Published:  10 June, 2010

Today's currency analysis from our currency partners Smart Currency Exchange predicts the pound is likely to remain under pressure in the run up to the emergency budget on June 22 as investors remain cautious.

Currency Rates: June 10
EURO/GBP - 1.210
US$/GBP - 1.459
CHF/GBP - 1.672
CAN$/GBP - 1.515
AUS$/GBP - 1.737
ZAR/GBP - 11.317
JPY/GBP - 133.18
HKD/GBP - 11.377
NZD/GBP - 2.149
HUF/GBP - 341.71

Sterling recovered yesterday when investors bought back into the pound after analysts stated that the pound had been oversold on Tuesday following comments by credit rating agency Fitch. In the end, the comments made by Fitch added nothing new to what the markets knew already.

Concerns over the deficit and a potential credit rating agency have been around since the start of the year, and many investors have been calmed by the aggressive cost cutting measures that have already been announced by the new government. As a result, the pound hit $1.4578/ £1 and was helped along by a strong performance by stock markets as risk aversion eased slightly.

There is a lot of data out today, with the main UK news being the Bank of England's interest rate decision. While it is expected to remain on hold for the considerable future, there could be volatility if any comments are made regarding the £200 billion asset purchasing facility.

In the euro zone, there was little data out yesterday and the single currency took its lead from general sentiment and reaction to other currencies. With sterling having a strong day, the euro fell towards the 18 month low it hit last week, with the pound firmly back over the €1.21/£1 mark.

Out later today, we have the European Central Bank press conference in which the bank will outline this month's interest rate and monetary policy decision. The press conference can cause considerable volatility if any of the comments made are unexpected.

In addition, there is some French unemployment data out this morning. Get in touch with a trader to make sure you are buying at the right time.

In the USA, the US dollar fell yesterday as risk appetite increased. There is a fair amount of data out today, with the trade balance expected to show a widening to $42 billion.

In addition, treasury secretary Geithner addresses the Senate on China later this afternoon. There could be some interesting discussion regarding the exchange rate 'peg' (ie fixed exchange rate) that is in place between the US dollar and Chinese yuan. The US dollar seems to be swinging back and forth at the moment on sentiment.

Elsewhere, New Zealand raised their interest rates by 0.25% to 2.75% for the first time since the credit crunch hit. A report by Credit Suisse shows that many expect another 0.25% rise at the next meeting in July. Rising interest rates mean a stronger currency - ensure you don't miss out.

The Australian dollar strengthened as data showed an unexpected jump in the number of jobs added to the economy last month.

* Smart Currency Exchange is a currency partner to Harpers Wine & Spirit. Harpers Wine & Spirit has teamed up with Smart to provide readers with a free bespoke currency service.

If you are making or receiving international payments and are interested in talking to Smart please go to: to get a FREE no obligation quote or to download the Smart Wine & Spirit report. Alternatively call Smart on 0207 898 0500.

* To get currency udpates direct to your email then contact Richard Siddle on