Pound Sterling - UK Markets

Sterling rates for currency transfer are weaker this morning after industrial and manufacturing production figures reveal distinctly downbeat results in the UK. The pound is currently valued at 1.62 against the euro and 1.16 against the pound, having gained slightly from yesterday's exchange rates.

Industrial production figures out this morning show the sector contracted -0.6 in May, much greater than expected by markets with the annual rate of decline falling to -11.9%. Manufacturing production is also -0.5% lower on the month. Industrial and manufacturing production account for a large sector of UK GDP and the weak results have lowered sterling exchange rates this morning. The MPC decision is due later in the week and thus far, the BRC had advised the MPC to utilize the full extent of the £150 billion available for quantitative easing. Today's production figures, combined with trade statistics and the MPC statement are likely to determine sterling sentiment in the short term.

US Dollar - US Markets

Rates for US currency transfer are stronger this morning, climbing against its major currency partners in the midst of market uncertainty. The US currency reached a one-month high against the pound yesterday and this morning the greenback has lost ground to the yen and Australian dollar.

Static markets at present are supporting the US dollar and yen as uncertainty over the state of global recovery means investors are wary of taking on risk. Crude oil is trading in the region of USD65 a barrel amid uncertain demand. The pending G8 meeting is driving risk aversion at present and economists are claiming the debt burden of developed nations will alter the global balance of economic power in future. The US budget deficit is forecast to hit 13.6% of GDP in 2009. There is no data out in the US today

Euro - European Markets

Currency transfer rates for the euro are weaker this morning against the traditional safe havens, as negative sentiment in the eurozone drives a flight to the US dollar and yen. The euro currently remains below 1.40 on the US dollar although the single currency has gained on the South African rand, Swedish kronor and pound.

German factory orders are out this morning and these should provide an indication of re-stocking levels in the eurozone's largest economy. This morning industrial and manufacturing production figures in the UK came in much weaker than expected, lowering confidence that we are seeing a slow rebuilding of factory stock levels. Yesterday the Sentix survey showed investor confidence was low in the eurozone and this led investors to favour the US dollar and yen as reserve currencies. Today is light for euro data with first quarter GDP figures out tomorrow.

Other Currencies - Highlights

The Australian dollar has attained slightly higher rates for currency transfer this morning following the RBA decision to leave interest rates unchanged at 3%. This is the third consecutive month the RBA has left rates on hold and Australia was one of the few economies to grow in the first quarter. The RBA noted that market conditions are better than expected as the Australian economy seems to have skirted round recession, supported by demand for commodities from industrializing nations. The Australian unemployment rate is due on Thursday and this will likely impact on AUD exchange rates.