Sterling makes early gains, but weakens later in the day

Published: 08 August, 2012

Sterling made gains of nearly a cent against the US dollar and just under half a cent against the euro yesterday morning, due to better than expected industrial and manufacturing data for June.

Currency rates - August 8

EURO/GBP - 1.2589
US$/GBP - 1.5586
CHF/GBP - 1.5130
CAN$/GBP - 1.5555
AUS$/GBP - 1.4784
ZAR/GBP - 12.7475
JPY/GBP - 122.17
HKD/GBP - 12.0878
NZD/GBP - 1.9176
SEK/GBP - 10.4939
AED/GBP - 5.7243
US$/EURO - 1.2376
INR/GBP - 86.03

But according to Smart Currency, during the course of the day some of the gains were given back. Today we have the Bank of England's inflation report released which it says has the potential to surprise and could result in rapid movements either way.

The euro continues to benefit from a belief that the European Central Bank will continue to buy the government debt of Italy and Spain. Germans support announced on Monday for the ECB's actions was clearly very helpful. However the detail of how full intervention will work is still awaited and experience over the last two years has been one of constant disappointment.

The US dollar continues to trade in a narrow range against sterling with a peak around the US$1.57/£1 level and a low at US$1.55/£1. As noted better than expected UK economic data boosted sterling in the short term as it pushed up towards the upper end of this range yesterday morning. Limited economic data out in the US today so it is likely to be news elsewhere than influences movement.

The Australian dollar pushed towards a low of 1.47 against sterling yesterday as the Australian Reserve Bank keep interest rates on hold at 3.5%. Very much as expected but highly supportive as investors wanting a triple A and high yielding currency will look no further than the Australian dollar.

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