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Sterling slips versus euro and dollar in thin trade

Sterling slipped to two-week lows against euro yesterday as a sovereign account bought the common currency for month-end requirements, while the pound eased against the dollar as stock markets in Europe and the US traded in negative territory. The pound was little changed by a weak CBI survey that showed British retail sales fell at their fastest pace in over a year, underlining the fragility of the UK recovery. Investors are wary of taking significant positions in major currencies ahead of a speech by Federal Reserve President Ben Bernanke at Jackson Hole, Wyoming today, with trade said to be light in sterling. Sterling was down 0.3 percent for the day against the dollar at $1.6327, off its early European session highs of $1.6397. Traders said weakness in Euro¬pean and US stocks put some pressure on the pound in afternoon dealing.
Data 09.30: Revised GDP q/q.


Additional stimulus from the Fed is just as much about stabilising global financial conditions as it is the domestic environment, and on that point we are reminded that the second Greek bailout is in jeopardy as EU members debate withdrawing their support while the banking system is facing unprecedented pressure. Yet, the market has been able to turn a blind eye to consistent troubles. That may be changing. In yesterday’s session, the mere rumour of Germany facing a downgrade from its top rating sent the DAX plunging 4 percent in 15 minutes. On the currency front we have actually seen the euro strengthen against sterling, from 1.1490 seen on Tuesday to currently trade around the 1.1300 handle.  
No major data due today.


As the world’s central bankers descend on the Grand Tetons for a closely watched annual conference, the mood in Jackson Hole is again one of profound unease. The symposium brings together most of the globe’s central bankers and many of the planet’s smartest economists to talk about the issues of the day. It was here one year ago that Federal Reserve chief Ben Bernanke signalled openness to massive bond purchases. What central bankers can do is shape monetary policy to offer a steady, reliable backdrop that might allow growth, and over time use both their official policy tools and their influence to try and guide the world toward greater prosperity.
Data 13.30: Prelim GDP q/q; 15.00: Fed Chairman Bernanke Speaks.


• Reserve Bank chief Glenn Stevens says Australia is well positioned to tackle any further weakening of international conditions, prompting a rise in the dollar as markets priced out the risk of deep interest rate cuts.


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GBP/USD                        1.6310

GBP/EUR                        1.1295

EUR/USD                        1.4435

GBP/JPY                         125.65

GBP/AUD                        1.5555

GBP/NZD                         1.9600

GBP/ZAR                         11.7750

GBP/CHF                         1.2890

GBP/CAD                        1.6080

GBP/SGD                        1.9700

GBP/THB                         48.80

GBP/HKD                        12.7190

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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