Sterling climbed against the US dollar and briefly touched €1.15/£1 against the euro after data unexpectedly showed that services sector activity expanded at the fastest pace in four months. Whilst this provided a welcome piece of positive economic data, analysts were keen to point out that the UK recovery is still very fragile. Figures released earlier in the week showed a sharp contraction in the level of manufacturing in the UK. Sterling ended the day up 0.85% against the US dollar and posting 1% gains against the Australian and Canadian dollars. Investors have been disappointed at relatively weak UK economic data over recent months, but some analysts are feeling cautiously optimistic that the UK government’s austerity drive will put the economy in a much stronger position than the USA or euro zone. Call in now for a live exchange rate.

In the euro zone, the euro strengthened against the US dollar yesterday after stronger than expected retail sales figures provided a welcome boost to the economic prospects of the region. Sales rebounded by 1% after the previous month’s contraction. In addition, the euro surged by 2% against the Swiss franc after an unexpected interest rate cut by the Swiss National Bank. The SNB cut interest rates and pumped in liquidity in an attempt to weaken the “massively over-valued” Swiss franc which is at record highs against many currencies following safe haven flows. Call in now for a live exchange rate.

In the USA, credit rating agency Fitch affirmed its AAA credit rating for US government debt following Congressional approval of a $2.1trn package of spending cuts, but warned that the US government must cut the debt burden in order to avoid a future default. Poor PMI data saw the US dollar drop to an all time low against the Swiss franc before the SNB’s rate intervention. There are concerns that other ratings agencies will downgrade the US on the grounds that the package does not go far enough. Call in now for a live exchange rate.

Elsewhere, with the SNB cutting interest rates in Switzerland, markets are poised for the Bank of Japan to follow suit in expanding the size of its asset buying programme. In a similar vein to the Swiss franc, the Japanese yen has surged against other currencies as investors look for safe haven investments. Call in now for a live rate to ensure you don’t lose out.

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