Pound Sterling - UK Markets

Sterling currency exchange rates are significantly lower  this morning due to political uncertainty in the UK. The pound finished trading on Friday below 1.59 against the US dollar after reaching 1.66 earlier in the week. This morning sterling currency exchange rates have slid further to 1.58 against the dollar and 1.14 on the euro.

Uncertainty over the future of the UK government is putting the pound under pressure. Disastrous results for Labour in the European parliamentary elections led sterling exchange rates to slide against the euro and US dollar throughout the day on Friday. Lloyds is to repay the government about GBP2.4 million pounds after a share sale to private investors. With little data out in the UK today and tomorrow, sterling could be subject to further currency volatility as political events unfold.

US Dollar - US Markets

The US dollar is trading at stronger international currency exchange rates this morning on the back of more positive payroll data in the US. The dollar is currently valued at 0.63 versus the pound and 0.72 against the euro while losing ground against the yen to trade at 98.5.

US payroll data released on Friday was better than expected by markets and this led the dollar to strengthen against its international currency partners. The US economy shed 345,000 jobs in May, well below the expected figure. However the decline in non-farm payroll figures was still in excess of 500,000 and the official unemployment rate rose more than expected to 9.4%. Economists think this is reflects a greater number of people registering for work as evidence suggests the economic tide could be turning. There is no major data out in the US today.

Euro - European Markets

Euro foreign exchange rates have declined sharply against the US dollar and also slid against its major Asian currency partners this morning. The euro has also gained against the pound, Australian and New Zealand dollars. 

European currency exchange rates are little changed this morning as traders digest results of the European elections. The Swiss unemployment rate for May has risen to 3.5% and the EMU Sentix investor confidence survey has risen to -27, showing an improvement in economic confidence for May. German factory orders are due out this morning and these are expected to have risen by as much as 2% from the previous month. The German trade balance and industrial production figures are due tomorrow.

Other Currencies - Highlights

Australian currency exchange rates improved on Friday against the pound on the back of uncertainty in the UK political sphere. The merger between rival minors Rio Tinto and BHP Billiton also led to equity market gains in Australia. In early trading this morning the Australian dollar has sunk 0.16% on the pound as Australian and New Zealand markets are closed for a public holiday.

In New Zealand house prices in May fell at their slowest rate this year, leading to suggestions the property market may be bottoming out. Average house prices remain 8.1% lower than this time last year. There is no data out in New Zealand today.