Euro finishes down against sterling

The pound strengthened against the euro by 0.46 cents (0.40%) yesterday to close the day at 1.1591.

• In early trading yesterday sterling strengthened against the euro, following further evidence the UK’s housing market was stabilising. House prices in England and Wales fell at their slowest annual rate since November 2007 according to RICS, echoing other recent surveys suggesting house prices may be bottoming out.
  
• News that Prime Minister Gordon Brown would not be ousted by Labour parliamentarians anytime soon also bolstered the pound after heavy losses at the end of last week.
  
• So far today the pound has resumed its rise against the single currency, testing the six-month highs it reached last week.
  
• There are no major announcements due in the eurozone today, whilst in the UK Manufacturing Production figures are out at 09.30 BST.

Sterling rallies over 2.5 cents against US dollar

Sterling strengthened considerably against the US dollar yesterday, rising 2.54 cents (1.58%) to finish at $1.6305.

• In early trading yesterday the pound recovered from heavy losses endured over the past few days, after a survey released by RICS showed that UK house prices may be bottoming out.
  
• The news that the Prime Minister was safe in his job for the time being following a meeting with Labour MPs last night also calmed selling pressure on sterling yesterday, adding to its early gains.
  
• Sterling continued its rally yesterday afternoon on the back of US and European stock market rises, buoyed by an announcement by the US Treasury that 10 of the country’s biggest banks could repay a combined $68 billion of taxpayer money received during the height of the credit crunch.
  
• In trading so far today the pound has resumed its rally against the greenback, as improved risk appetite continues.
  
• In the UK, Manufacturing Production figures are out at 09.30 BST, whilst in the US Trade Balance data is out at 13.30 BST.

Euro finishes over $1.406 against US Dollar

The euro strengthened by 1.65 cents (1.19%) against the US dollar yesterday, closing the day at $1.4064.

• In early trading yesterday the euro gained against the dollar, as investors questioned whether there was a strong possibility of a US interest rate rise later this year to justify pushing the currency higher.
  
• The single currency’s gains continued yesterday afternoon after rises on European and US equity markets bolstered appetite for riskier currencies. The news that 10 of the US’s biggest banks could repay some of the money they received in government bailouts drove this rally. In addition, news that Latvia, one of the most troubled economies in Eastern Europe, could yet avoid devaluing its currency helped the euro.
  
• So far today the euro has risen slightly against the dollar, as the market looks for clues about the chance of a US interest rate rise by the end of the year.
  
• There are no major announcements out in the eurozone today, whilst in the US Trade Balance figures are due at 13.30 BST.

Political calm helps sterling vs. aussie

The Australian dollar lost ground against sterling yesterday, following further evidence that the UK housing market is starting to stabilise.

• The RICS survey revealed that UK house prices had fallen at their slowest rate since November 2007. Added to other recent housing data, there is now a strong argument that housing prices may be bottoming out.
  
• The pound also was boosted by Labour MPs supporting embattled Prime Minister, Gordon Brown, helping calm British political waters.
  
• Today a number of industrial and manufacturing figures are due from the UK, which will be eyed closely for any potential improvement. Any data that suggests no further quantitative easing will be required by the Bank of England will be taken as a positive.

Kiwi losses further ground against sterling & aussie

The New Zealand dollar lost further ground against both sterling and the aussie yesterday.

• Demand for the kiwi was undermined as lower risk appetite and uncertainty over the Reserve Bank of New Zealand’s interest rate decision later in the week continued to weigh.
  
• Investor have reduced their position in the New Zealand dollar leading up to the RBNZ decision this evening, with markets generally split over whether the bank will cut rates or leave them on hold.