UK currency rose against a weak euro but fell against a buoyant dollar earlier today, caught between flows in the two larger currencies pushed by investor anxiety surrounding the Austrian banking sector.
Pound Sterling – UK Markets
Sterling sentiment stayed broadly bearish trading up on the euro at 1.109 but down against the dollar at 1.622.
The pound’s progress has been hindered by the outlook for Britain's fiscal health as the next government will seemingly be forced to tackle a huge budget deficit.
US Dollar – US Markets
The dollar rose to a more than two- month high against the euro amid speculation improving economic data in the U.S. will spur the Federal Reserve to signal an exit from policies intended to combat the recession.
The greenback appreciated to 1.492 against the euro earlier on, its highest level since October.
Euro – European Markets
Concerns over Austrian banks slammed the euro today to its lowest in over two months against the dollar (1.463) and almost a month against the pound (89.36).
Oesterreichische Volksbanken, Austria's top cooperative bank, denied being at risk of nationalisation and claimed that a media report saying it was on a regulator's watchlist was incorrect.
Other Currencies – Highlights
The yen weakened against eight of its 16 major counterparts as easing concern about a default in Dubai limited demand for Japan’s currency as a refuge.
The Norwegian krone and the Swedish krona both fell against the US dollar as investors speculated the central banks of both Scandinavian nations will keep interest rates unchanged at tomorrow’s meetings.
The krone fell 1% to 5.83 per dollar whilst the krona also dropped 1%, to 7.17.
UK’s CPI figure in spotlight, as the Pound value drops
Sterling slumps after lower than expected CPI results