Subscriber login Close [x]
remember me
You are not logged in.

Currency update, September 8: sterling falls due to European banking concerns

Published:  08 September, 2010

Sterling fell to a 6 week low against the US dollar yesterday after concerns over the European banking sector and financial difficulties in the housing sector.

Currency Rates

EURO/GBP - 1.217
US$/GBP - 1.543
CHF/GBP - 1.557
CAN$/GBP - 1.619
AUS$/GBP - 1.686
ZAR/GBP - 11.233
JPY/GBP - 129.18
HKD/GBP - 11.995
NZD/GBP - 2.150
EURO/US$ - 1.267
HUF/GBP - 347.99

Social housing maintenance firm Connaught suspended trading in its shares on Tuesday after failing to secure enough funding to pay its debts. The BBC said that the firm is on the brink of administration. Data from the British Retail Consortium showed that sales grew in August, but consumers remained cautious. With investors spooked by risk aversion, sterling hit $1.5298/ £1 - the lowest in 6 weeks. Sterling dropped to a 6 week low against the euro on Monday. There has been some respite however, as a Halifax survey of house prices came in better than expected showing that prices rose by 0.2% against an expectation of a 0.3% drop. Later today we have industrial production and manufacturing data.

In the Euro zone, fresh worries over the European banking sector were sparked after an article published in the Wall Street Journal stated that the much criticised European bank stress tests had understated the exposure of many of the banks to risky assets. This followed an announcement by Germany's banking association that the country's 10 largest banks would need an additional €105bn injection in order to comply with new banking regulations regarding capital adequacy. There is industrial production data out today.

In the USA, as a result of the investor jitters over Europe, risk aversion jumped which saw a boost in demand for the US dollar as investors looked for safer haven to invest their funds. In a week of light data releases for the USA, there is some data released later on consumer credit.

Elsewhere, the Japanese yen gained 0.4% overnight against major counterparts as stock exchanges slumped in Asia and investors moved riskier investments back in to the safe haven of the yen. Speak to a trader today about your upcoming requirements to ensure you are adequately protected.

Smart Currency Exchange is a currency partner to Harpers Wine and Spirit. Harpers Wine and 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 and Spirit report. Alternatively call Smart on 0207 898 0500.