Pound Sterling - UK Markets

Sterling foreign exchange rates are slightly lower this morning following worse than expected retail sales figures in the US. The pound is currently declining against its major currency partners, valued at 1.65 against the US dollar and 1.15 against the euro.

The pound declined against the single currency yesterday as the euro was buoyed by news that France and Germany had escaped from recession territory. This is significant news as the US and Europe are the UK's two major export markets. There is no data released in the UK today and sterling will continue to take its direction from US and European announcements.

US Dollar - US Markets

US foreign exchange rates have gained this morning against the euro, pound and Australian dollar. The pound is lower against the yen, New Zealand and Canadian currencies.

US exchange rates received a boost yesterday after retail sales came in at -0.1% for July, the first decline in three months. Jobless claims also rose to 588,000 in the week to 8 August indicating that the US has not quite entered recovery phase though the Fed stated that activity is "levelling out". US inflation and industrial production figures will be of interest to markets later in the day. 

Euro - European Markets

Euro foreign exchange rates have remained strong this morning, consolidating on recent gains and currently trading at 1.42 against the US dollar and 0.86 against the pound.

After GDP figures showed a return to growth for France and Germany yesterday, data this morning shows the Spanish economy contracted -1% in the second quarter. Spain is battling to recover economically as the country struggles with 18% unemployment and a deflated property market. The EMU consumer price index this morning has come in at -0.7% for July and there is no further data in the eurozone today.

Other Currencies - Highlights

New Zealand retail sales rose 0.1% on the month to June, adding to a more upbeat view of recovery. The Australian Reserve Bank governor noted that current interest rates are at "emergency levels" and indicated that the bank would work towards raising interest rates over the next few months. The hawkish testimony sent AUD foreign exchange rates to a yearly high against the US dollar.