Sterling gains against US dollar over oil price concerns |
| Written by Harpers Editorial team |
| Tuesday, 01 March 2011 10:14 |
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Sterling gained against the US dollar yesterday as concerns over the price of oil dented the US currency. Currency Rates EURO/GBP -Β 1.1800 US$/GBP β 1.6320 CHF/GBP β 1.5167 CAN$/GBP - 1.5842 AUS$/GBP β 1.6038 ZAR/GBP β 11.320 JPY/GBP βΒ 134.04 HKD/GBP βΒ 12.710 NZD/GBP β 2.1702 SEK/GBP β 10.2781 US$/EURO - 1.3826 Sterling has benefited recently from expectations that the Bank of England is looking at raising interest rates by the summer. However, with this βpriced inβ (already reflected in the exchange rate) to the sterling/US dollar exchange rate, there is not much room for a move beyond $1.6250/Β£1. It is also a very risky week for sterling, with a wide array of purchasing data from a number of key sectors of the UK economy. Poor readings from these surveys could quite conceivably unduly impact interest rate expectations in the UK and see sterling fall. In the euro zone, the euro strengthened to the highest level against the US dollar since the start of February as investors speculated over an upcoming speech by US Federal Reserve Chairman Ben Bernanke. Many expect the US policymaker to maintain his soft approach to US monetary policy which contrasts with recent talk of tighter monetary policy in the euro zone. Inflation in the region hit a 2 year high of 2.3%, and is set to rise further in February as higher oil prices filter through. In the USA, rising oil prices have caused concerns over US growth. Prohibitively high oil prices could see impact on the fragile economic recovery, and many investors are concerned over the impact on US foreign policy over the political upheaval taking place in the Middle East and North Africa. This saw the US dollar fall to a 3 .5 month low against a basket of currencies β not helped by poor pending home sales figures that came in worse than expected. Elsewhere, the situation in Libya seems to be getting worse with world leaders putting pressure on the Libyan leader Muammar Gaddafi to leave power. From a currency perspective, any kind of instability has been benefiting the Swiss franc and there is no reason we wonβt see the Swiss currency strengthen further. 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 www.SmartWineSpirits.com to get a free no obligation quote or to download the Smart Wine and Spirit report. Alternatively call Smart on 0207 898 0500. |
