Sterling fell to a four week low against the euro on Thursday as investors became optimistic over progress in Greek debt talks and concerned over UK economic weakness. UK data from the Confederation of British Industry showed there was a far worse contraction in sales than had been anticipated. Sterling strengthened against the US dollar, hitting the highest level against the US currency since December 22nd after breaking through $1.57/£1 on stronger. However, poor GDP figures on Wednesday and the further likelihood of poor UK data are set to limit sterling’s upside against the US dollar over the longer term.

In the euro zone, the euro hit a 5 week high against the US dollar on speculation over the progress of Greek debt negotiations. Rumours circulated that Greece’s private creditors had agreed to lower the amount paid to them as interest on their bond holdings in order to reach agreement on time and avoid a messy default. This is set to dominate the headlines so call in now for a live exchange rate.

In the USA, the US dollar weakened yesterday and global stock markets gained as markets reacted to optimism over a potential solution to the Greek debt situation. In addition, the announcement earlier in the week that the Federal Reserve would keep interest rates on hold for up to 2 years helped drive risk appetite and deliver the first signs of a resurgent carry-trade. Out later today is US GDP data so call in now for a live exchange rate.

Elsewhere, Gold prices were steady at their highest level in over a month on the news of the Fed’s policy stance. Low interest rates make gold more attractive and help investors hedge against inflation, as they gain from increasing commodity prices that inevitably follows cheap borrowing costs.

Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/