Pound Sterling - UK  Markets

Currency rates for the pound have gained on the safe haven currencies this morning, climbing slightly against the US dollar and yen. The pound is also trading lower against its higher yielding currency partners, falling against the euro, Australian and kiwi dollars after the Australian central bank decided to raise interest rates overnight.

UK industrial and manufacturing production figures out this morning have come in weaker than expected, with industrial production falling -2.5% in August, while manufacturing production fell -1.9%. This downbeat data has continued to keep sterling under pressure, despite the positive service sector PMI yesterday and Halifax house prices rising 1.6% rise in September. Sterling exchange rates are still struggling to break key resistance levels around 1.60 against the US dollar and 1.09 against the euro. Nationwide consumer confidence figures are due later in the day.

US Dollar - US Markets

Currency rates for the US dollar are weaker this morning, sliding over 0.5% against the euro and pound. The greenback is currently trading at 0.67 and 0.62 to the euro and pound respectively, while also losing ground against its major currency partners with the exception of the South African rand.

The US dollar has weakened after speculation that Middle Eastern states are in negotiation to reduce the oil industry's dependence on the US dollar. President Obama is set to consider an increased mix of spending cuts and government stimulus measures to aid the US economy, as economic recovery struggles to gain hold in the region and the dollar is still facing threats to its status as an international reserve. Today is light for US data with consumer credit and the monthly budget statement for September due tomorrow.

Euro - European Markets

Euro currency rates are broadly stronger this morning, rising against its major currency partners with the exception of the Australian dollar, Swiss franc and Swedish kroner. The euro is currently valued at 1.47 against the US dollar and 0.92 against the pound. 

Positive figures from the ISM non-manufacturing survey in the US yesterday boosted demand for the riskier currencies, allowing the euro to gain on the US dollar. The single currency also posted further gains against the pound after an expansion in the UK services sector failed to ignite market confidence. This morning Switzerland's consumer price index has come in unchanged for September, declining 0.9% on the year. There is no further data in the eurozone today with second quarter GDP figures due tomorrow. 

Other Currencies - Highlights

The Russian inflation rate has fallen to -0.7%, its lowest level in two years as falling prices and consumer demand have left the door open for further interest rate cuts. Russia made headlines last month when it continued to slash interest rates, prompting speculation that recovery is a long way off for eastern Europe. A slump in Hungarian industrial output has also indicated the region is struggling to emerge from its worst recession in nearly two decades.

The Australian reserve bank has surprised markets overnight by raising the Australian base rate from 3% to 3.25%. This comes after the Australian economy recorded growth in the first half of 2009 and remains the only nation in the developed world to have avoided recession. The Australian government distributed over AUD42 billion worth of economic stimulus, including handouts to low income families and record low interest rates. Economists are expecting rates will edge upwards to 4% after being held at “emergency” levels of 3%.