Pound Sterling - UK Markets

Currency transfer rates for the pound have fallen in early trading this morning, on a downward trend against the US dollar and euro. The pound is currently valued at USD1.6350 and EUR1.1565

The CBI survey estimated that retail sales fell in July, after an unexpected boost in June as rising unemployment levels and cooler weather dampened consumer activity. British house prices rose month on month for the first time since January 2008, although this marginal recovery is offset by the downturn in manufacturing and production. Economists are still waiting for record low interest rates and QE to impact on the economy. UK consumer confidence figures are out tomorrow.

US Dollar - US Markets

Currency transfer rates for the US dollar rose this morning, climbing against its major currency partners as investors favour safe haven trading. The US dollar is currently valued at GBP0.6116 and EUR0.7074. 

US consumer confidence fell more than expected by economists, dragged lower by rising unemployment figures. This triggered a bout of risk aversion yesterday and the trend in currency transfer rates continues to be determined by equity markets and risk. The Fed's beige book is due in the US this evening and this should provide an indication of overall economic health. Durable goods orders and mortgage applications are also released and these are likely to affect currency exchange rates.

Euro - European Markets

Euro currency transfer rates are mixed this morning, rising and falling against its currency partners according to risk appetite in the market. In early trading the euro has climbed to GBP0.8640 and AUD1.7250, while also falling to USD1.4133.

Low consumer confidence figures in the US reduced appetite for the euro yesterday, sending the single currency lower on the back of risk trading. This morning German inflation data is due and economists are predicting Germany will enter a short period of deflation. The ECB predicts that deflation is likely across the entire eurozone until the end of 2009, with inflation returning to 2% thereafter. There is no further data in the eurozone today.

Other Currencies - Highlights

The Australian dollar reached an 11-week high against the pound yesterday, as currency transfer rates for the Aussie rose following a speech from the governor of the Reserve Bank. Glenn Stevens noted that threats to the Australian economy are now more balanced and this led to speculation we could see interest rate rises as early as December 2009.

Poland is due to make an interest rate decision today and economists are predicting the central bank will leave the base rate unchanged. The general consensus in Poland is that the economy has hit bottom and will likely begin a recovery soon. The Polish zloty declined to 4.199 against the euro in anticipation of the decision.