The pound finishes up against the euro

The pound strengthened by 0.84 cents (0.72%) against the euro on Friday, closing the day at 1.1829.

• In early trading on Friday sterling strengthened against the euro, as the lack of economic data prompted traders to take their lead from equity markets. The FTSE 100 eventually finished the day up 65.07 (1.52%).
  
• It also allowed investors to reconsider a week of less positive data for the pound, and therefore reassess whether the UK economy really is on the road to recovery. Poor retail sales and unemployment data earlier in the week had hit sterling, however sentiment improved on Friday.
  
• In addition, a warning from the European Central Bank that banks in the region might face another $283 billion of losses by the end of next year reduced appetite for the single currency.
  
• In trading so far today the pound has continued its rise against the euro, after comments over the weekend from Jean-Claude Trichet, President of the ECB, who said there would be no more stimulus packages in the region. ‘In our analysis, this is sufficient,’ he said.
  
• There are no major announcements due in the UK today.

Sterling rises over 1.5 cents vs. US Dollar on Friday

Sterling rose sharply against the US dollar on Friday, finishing up 1.63 cents (1%) at $1.6492.

• In early trading on Friday sterling gained against the dollar, as rising share prices stoked some demand for higher-risk currencies like the pound. The FTSE 100 eventually closed up 1.52%.
  
• The dearth of economic data on both sides of the Atlantic also encouraged investors to re-examine optimism that the UK economy may soon recover, a view that was fuelled by more positive data two weeks ago. But poor retail sales data in particular, in addition to speeches by Chancellor Alistair Darling and BoE Governor Mervyn King urging caution about improvements in the economy, weighed on the pound last week. However, sentiment improved on Friday.
  
• In trading so far today the pound has dipped against the greenback, after a report released by the Centre for Economics and Business Research said roughly 334,000 jobs would be lost across the business service sectors in the next three years.
  
• There are no major announcements due in the UK or US today.

Euro dips against dollar

The euro dipped by 0.41 cents (0.29%) against the US dollar yesterday to finish the day at $1.3939.

• In early trading on Friday the euro strengthened against the dollar, as more upbeat US data and gains in European equities boosted hopes that a global economic recovery was on course.
  
• The euro’s gains were limited, however, as investors were wary of taking on large positions ahead of the US Fed’s policy meeting later this week and issuance of another record batch of US government debt.
  
• In trading so far today the single currency has weakened sharply against the dollar, after news over the weekend that President of the European Central Bank, Jean-Claude Trichet, had no intention of extending the ‘completely extraordinary’ stimulus packages already unveiled by the bank.

Aussie weakens despite Asian stock gains

The aussie slipped against the pound on Friday, despite rises in Asian stocks spurring demand for higher-yielding assets.

• On a good day for the pound against a basket of currencies, the aussie slipped against the pound on Friday as improved sentiment about the UK economy swept the market.
  
• Earlier in the week, poor UK retail sales and unemployment data had hit sterling, however gains on London equity markets helped the pound gain ground on Friday.
  
• There are no major announcements due in the UK or Australia today so traders are likely to take their lead from broader market movements.

Sterling strengthens vs. kiwi on FTSE gains

The pound strengthened against the kiwi on Friday, despite investors being drawn to the South Pacific nation’s assets because of its 2.5% interest rate.

• The kiwi weakened against sterling on Friday as a 1.52% rise on the FTSE 100 buoyed hope that the UK economy was close to a recovery. Poor data earlier in the week had hit the pound.
  
• There are no major announcements due in the UK or New Zealand today so traders are likely to take their direction from broader market movements.