Sterling fell against the US dollar yesterday, tracking weakness in the euro and as concerns over the UK economy’s fragility impacted on sterling’s prospects. Last week’s shock move by the Bank of England to pump an additional £75bn into the UK economy through a second round of Quantitative Easing has also not helped sterling this week. However, the effect has been less detrimental to sterling than when QE was first introduced in 2008. With many developed countries staring down the barrel of further monetary easing, the pre-emptive moves by the Bank have been seen as a positive thing. Call in now for a live exchange rate.

In the euro zone, the euro fell off 1 month highs against the US dollar on Thursday as investors became concerned over European banks. In what has been a volatile week, Slovakia’s parliament eventually approved plans for the expansion of the European bailout fund after initially voting against the measures earlier in the week. Even with a strengthened bailout fund, European banks remain vulnerable as the ECB warned that any sovereign debt defaults would damage the credibility of the euro.

In the USA, it has been an interesting week, with tensions hotting up between the USA and China over a potential US bill to levy tariffs on Chinese imports in order to mitigate China’s artificially undervalued yuan that has damaged US manufacturers. China is the biggest holder of US government debt, so the US has to be careful not to cause an upset – especially given the funding difficulties faced earlier in the year. Call in now to ensure you don’t lose out.

Elsewhere, with the focus so heavily on the European debt crisis this week, the Australian dollar has been trading flat against the US dollar despite gaining initially following a decline in the unemployment rate for September. However, weak trade data from China damaged any further gains for the currency. Call in now for a live exchange rate.

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