Sterling climbed to a 15 month high against the euro yesterday after investors sought to diversify further away from the ailing euro and looked for safety in alternative currencies. With the UK economy – despite its weaknesses – looking relatively stronger than the euro zone, investors have been moving funds into UK based holdings. With the UK economy set for a tough period as the government maintains austerity measures in order to keep the AAA rating, sterling could drop off later in the year. Call in now to ensure you take advantage of better euro rates.

In the euro zone, Germany managed to find adequate demand at an auction for 10-year government bonds yesterday but left the markets underwhelmed and concerned over the ability of sovereigns within the region to raise funding on the bond markets. The lacklustre bond issue sets up a tense few days as France looks to sell bonds on Friday and Italy and Spain do so next week. Poor demand on Thursday could be seen as a case for France losing its AAA rating, which would further dent the single currency. Call in now for a live exchange rate.

In the USA, the US dollar strengthened yesterday as risk appetite turned sour in the face of the poor bond auction in Europe. US stock markets followed European stock markets down as concerns centred on the euro crisis once more. In terms of data, it was a light day yesterday but key unemployment figures are released later today ahead of the main non-farm payroll numbers on Friday.

Elsewhere, the drop in risk appetite saw the riskier commodity backed currencies fall back marginally yesterday as investors moved out of the higher yielding currencies and into safer options. Call in now for a live exchange rate.

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