Sterling fell across the board on Thursday as a spike in oil prices saw investors look to safer haven currencies on concerns over the global recovery. As a result, sterling slipped to a 3 week low against the euro and dropped off Wednesday’s 3 week high against the US dollar. The pound was boosted on Wednesday following the Bank of England’s meeting minutes that showed an increased likelihood of an interest rate hike, but this rally soon ran out of steam as risk aversion saw global risk aversion and a move to safer currencies. Out later today we have a 2nd estimate of the recent GDP figures – this could cause some volatility, so call in now for a live exchange rate.

In the euro zone, the euro benefited from yet further talks from a key European Central Bank policymaker over interest rates. Axel Weber boosted prospects of a rate rise, stating that the only way for interest rates to go was up. Inflation in the region has been creeping up so, like the UK, markets now expect an interest rate hike in the coming months to deal with inflation. Out today we have some loan and spending figures.

In the USA, oil prices stayed around 2 ½ year highs as concerns over supply have seen the price shoot up. Whilst oil prices dipped slightly on reassurances from Saudi Arabia that it could counter the disruption to supply, tensions in the region have kept investors very concerned. The US dollar – especially US government bonds – have been in high demand as investors look for safe haven assets in times of geopolitical turmoil. Call in now for a live exchange rate.

Elsewhere, the Swiss franc has been a key benefactor of the Libyan crisis, with high demand for the traditionally safe currency. Despite all the talk of interest rate hikes in Europe and the UK, Switzerland might actually be closest to raising interest rates, so if you need to buy Swiss francs, we could see sterling drop much further in the coming months so call in now to avoid losing out.

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