Sterling hit a 4 week high against the US dollar yesterday, falling just short of $1.58/£1 but closing the day up by over 1%. Sterling shrugged off figures that showed the highest level of unemployment since 1994 as investors seemingly reversed excessively short positions against the pound i.e. bought back sterling after betting it would fall. After an initial plummet in the value of sterling, markets have warmed to the Bank of England’s uncharacteristically proactive approach to monetary policy. With most other developed countries looking at further easing themselves in the coming months, the move doesn’t look as bad as it did the first time round. Cal in now for a live exchange rate as there is UK trade data released today which could cause some movement.

In the euro zone, the euro rallied against the US dollar, hitting a one month high against the US currency on hopes that (despite a ‘no’ vote) Slovakia’s parliament would approve an expansion of the European Financial Stability Fund, which is seen as a critical move in the survival of the euro zone. Some analysts feel that there are numerous political issues facing the region that mean the euro is marginally overvalued at its current price. Call in now for a live rate.

In the USA, analysts are becoming more and more concerned about growing tensions between the USA and China over a US bill to pressure China into allowing its currency to appreciate. The US argues that the undervalued yuan exchange rate harms US manufacturers by maintaining artificially cheap prices of Chinese goods. If the bill passes, the USA’s biggest creditor (China) could end up retaliating. Call in now for a live exchange rate.

Elsewhere, mining stocks gained yesterday on the gradual recovery of precious metal prices as expectations gained over a reversal of China’s recent poor data. The Australian dollar is closely linked to commodities so call in now for a live exchange rate.

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