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Gloomy American data fuels recovery doubts

Sterling lost ground versus the dollar on Thursday, knocked by sharp falls in equity markets on weakening risk appetite, but the pound managed to outpace the euro, as the economy was seen holding up better than the stricken euro zone. Investor jitters over slowing global growth were heightened after data showed a plunge in factory activity in the US mid-Atlantic region, while the euro zones debt crisis continued to undermine investor confidence in the bloc. This put pressure on stocks and pushed the pound down 0.6 percent against the dollar to $1.6447 , but it was still not far from Wednesday’s 3 month high of $1.6590.
Data 09.30: Public Sector Net Borrowing.


Several European countries are demanding collateral on bailout loans they provide to Greece, after it emerged that Finland had secured a commitment earlier this week. Austria, the Netherlands and Slovakia added their voices to the demand for collateral to secure their commitments to Greece via the European Financial Stability Facility, despite senior Greek government sources saying no discussions had taken place with countries other than Finland. But other Eurozone countries have been quick to criticise the idea of demanding collateral, amid fears it could undermine the bailout agreement made last month. The euro continued weakening against sterling and is currently sitting around the 1.1530 handle.
No major data due today.


Shockingly negative economic data rattled markets in New York yesterday, adding to an ultra bearish day for the equities. Claims for US unemployment benefits rose, home sales dropped, inflation picked up and a Phila¬delphia factory index collapsed to worse than a two year low. The gauge of factory activity in the Mid Atlantic region fell off a cliff, printing minus 30.7 in the index for August, from a positive reading of 3.20 in July. Economists had predicted a reading in positive territory. The greenback has strengthened against the single currency over the last 24 hours, moving from the $1.4450 area down to current levels of $1.4260.
No major data due today.


• Australia’s dollar fell for a second day versus its US counterpart as Asian stocks extended global losses in equities, curbing appetite for higher yielding assets.

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GBP/USD                        1.6475

GBP/EUR                        1.1530

EUR/USD                        1.4290

GBP/JPY                         126.90

GBP/AUD                        1.5920

GBP/NZD                         2.0060

GBP/ZAR                         11.9120

GBP/CHF                         1.2980

GBP/CAD                        1.6320

GBP/SGD                        1.9970

GBP/THB                         49.10

GBP/HKD                        12.8490

red-down; blue-up (snap shot)

These rates are for indication purposes only.


For more information or to get the latest spot rates contact:

John Paul Georgiou

Senior Foreign Exchange Broker

+44 (0) 20 7959 6917      


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