Pound Sterling - UK Markets

Sterling currency rates are higher this morning, gaining to USD1.6429 and EUR1.1730. The pound is also over 1% higher against the New Zealand dollar and has gained 0.7% on the Japanese yen.

Sterling is stronger this morning after Nationwide reported that house prices could be recovering in the UK. Prices rose 1.3% in July, with mortgage approvals up to GBP11.4 billion up from GBP8.9billion in January. The housing market 'correction' is thought to be due to greater stability in the banking sector, with lower prices attracting first time buyers. Retail and industrial production sectors remain subdued. Consumer confidence is due in the UK later today. 

US Dollar - US Markets

Currency rates for the US dollar are lower this morning, sinking to GBP0.6063 and EUR0.7114 as positive data in the UK and eurozone support risk appetite.

US durable goods orders yesterday declined by -2.5% on the month, exceeding market expectations of a 0.5% decline. However excluding transportation, orders had only declined by -0.7%, indicating the large role of the automobile industry in the US production sector. Jobless claims are released in the US today and if negative, these could limit risk appetite and support the safe haven US dollar and yen. US GDP figures are out tomorrow and these are also likely to be a source of exchange rate volatility.

Euro - European Markets

Euro currency rates are in positive mode this morning, climbing against the US dollar, yen and major currency partners with the exception of the pound and Australian dollar. The euro is currently valued at GBP0.8535 and USD1.4087.

German unemployment has surprised markets this morning by remaining static at 8.3%, with jobless numbers falling by 6000 in July. While this is thought to be due to a government training scheme preventing some 30,000 enrolling in unemployment, the results could be positive for the euro. Eurozone consumer confidence is also due today with regional consumer inflation and unemployment figures due tomorrow.

Other Currencies - Highlights

After reaching a 10-month high against the US dollar earlier this week, currency rates for the Australian dollar fell yesterday after China capped lending levels on major banks. The AUD declined as investors feared this could also hold back Australian recovery prospects.

Currency rates for the New Zealand dollar have weakened this morning as the RBNZ voted to keep benchmark interest rates unchanged at 2.5% for the second consecutive month. The bank also noted that interest rates may be cut further to hold back a rising currency which would threaten recovery prospects. The New Zealand dollar fell to a three-week low against the US Dollar of 0.65 US cents.