Sterling fell towards the lowest level against the US dollar for over a year yesterday as poor construction data saw investors drop the pound on fears of further Quantitative Easing. Construction activity came in worse than expected, showing the worst figures for 10 months. Any negative data has impacted on sterling as it reinforces the case for a further round of QE. The Bank of England meets on Thursday and could conceivably pump further liquidity into the UK to provide a boost to growth. On a positive note, sterling hit a high of €1.1717/£1 earlier in the day as euro zone leaders failed to quell concerns over the sovereign debt crisis, but fell off as risk aversion reversed later in the day. Call in now to discuss leaving orders to take advantage of volatile rates.

In the euro zone, after a poor initial start to the day, the single currency made large gains against both the US dollar and sterling as US Federal Reserve Chairman Ben Bernanke pledged that the Fed would support the economy, increasing bets that the US would launch a further round of QE. In addition, European leaders delayed a decision on Greece’s next tranche of bailout funds. The vote was originally planned for yesterday, but has been delayed twice. Call in now for a live exchange rate.

In the USA, Fed Chairman Ben Bernanke’s comments gave a large boost to risk appetite, as he stated that the Fed would be prepared to take strong action to help promote a stronger recovery. It gave markets confidence that the Fed did in fact have further options available, despite already having completed 2 rounds of Quantitative Easing. Call in now for a live exchange rate.

Elsewhere, the Swiss franc fell against the US dollar and euro, with the US dollar hitting the highest level for 6 months on rumours that the Swiss National Bank would amend the recent currency exchange rate to weaken the franc further. Call in now to ensure you don’t lose out.

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