Sterling lost ground yesterday moving towards a seven and half month low against the US$ and falling below 1.16 against the euro. Yesterday’s inflation figures showed a further rise in the price of retail goods and services. Energy costs and the increase of VAT at the start of the year are being blamed. It will not be enough for the Band of England to increase interest rates. Recent data has also demonstrated that the UK’s trade deficit is widening causing concern amongst investors that the possibility of an export led recovery is petering out. Contact us today for a live rate.

The Euro zone debt crisis continues to dominate newspaper headlines. Borrowing costs in Italy continue their upward trajectory and there is ongoing speculation that a number of French banks could be have their credit rating downgraded [reducing their ability to borrow at good rates] by the rating agencies. One thing is certain, the debt crisis is still far from being solved and peripheral countries remain the point of concern. Out today are Euro zone industrial production figures which will show activity in the manufacturing and energy sector. Call in now for a rate.

In the US, the US dollar slipped from Monday’s seven month high against a basket of currencies. Yesterday’s data came in lower than expected with the price of imported goods falling for the month of August. Interestingly, President Obama also voiced his concern over the euro zone crisis calling for Euro zone policy makers to solve the problem as soon as possible as the crisis is weakening the global economy. Out today are US retail figures which measure consumer spending at retail outlets. This may cause significant volatility so call in now for a rate.

Elsewhere, commodity currencies such as the Australian dollar struggled slightly against the US dollar as data showed a decrease in Australia’s business confidence. South African bonds declined due to US dollar strength. As a result, market players are expecting interest rates to remain on hold in South Africa. Out today is New Zealand’s interest rate decision. This could cause a lot of movement, so call in for a live rate.


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