Pound Sterling - UK Markets

Exchange rates for the pound remain weak after downbeat industrial production figures, falling against all its major currency partners this morning. Sterling is currently valued at 1.59 against the US dollar and 1.07 against the euro.

Sterling remains at low levels after industrial production figures were much weaker than expected in August. Production fell by -2.5%, while manufacturing is 1.9% lower. Economists are predicting a rebound in September figures as August traditionally represents the summer break period. The UK economy is expected to exit recession in the third quarter and these figures may cast this prediction into doubt. The BRC shop price index is due today with a Bank of England interest rate decision due tomorrow.

US Dollar - US Markets

Foreign exchange rates for the US dollar are mixed this morning, losing ground to the yen, Australian and New Zealand currencies while gaining on the pound and remaining unchanged against the euro. The greenback is currently valued at 0.67 to the euro and 0.62 to the pound.

The US dollar gained ground yesterday as UK production data came in weaker than expected and figures showed US corporate earnings are expected to be positive in the fourth quarter. Oil remains in the region of USD69 a barrel on the back of demand from Asian economies and the US dollar has shrugged off doubts over its relationship to oil trading this morning. Consumer credit and monthly budget figures are due in the US today.

Euro - European Markets

Foreign exchange rates for the euro remain firm this morning, rising against the pound and South African rand while falling against the US, Australian and Kiwi currencies. The euro is currently trading at 1.47 to the US dollar and 0.92 to the pound.

This morning's figures show growth in the eurozone has been revised downward from market expectations in the second quarter, with the economy contracting by -0.2% or an annual rate of -4.8%. This has failed to dent euro exchange rates, which remain firm on the back of increased risk appetite in the market. The Swiss unemployment rate has also come in at a seasonally adjusted 4.1% in September.

Other Currencies - Highlights

Foreign exchange rates for the Australian and New Zealand dollars have gained ground this morning, rising on the back of market confidence after Australia raised interest rates yesterday. The Aussie dollar reached a 14-month high against the greenback, rising to 89.21 US cents. New Zealand's currency also rose as Fonterra, the nation's largest dairy exporter said milk powder prices reached a 13-month high due to increased demand from Asia.

Strong currency exchange rates for the yen continue to damage Japanese export levels, with Sony and Panasonic, two of Japan's major exporters of electronic goods losing out to Korean brands such as Samsung and LG. Japanese exporters are struggling with weak global demand and a strong yen, as well as competition from Korean based products. Sony is expected to announce an operating loss of over JPY40.5 billion yen in the third quarter.