Hi everyone – please find the latest currency updates below, thanks.
AUD: Over the last 12 months the average daily price for GBP/AUD has been 1.5523. This morning it was trading within half a cent of that level. In other words it has gone nowhere in a year. Investors currently worry that it will go backwards in coming months as the result of widely-predicted recession in Europe. However, it is impossible to rule out the possibility of another year of stability.
NZD: Like the Australian dollar, the NZ dollar's progress is being held back by the fear of an economic slowdown in Europe that could put a brake on global growth. Also like the Aussie, the Kiwi has gone almost nowhere in the last 12 months. The average daily price of 2.0253 for GBP/NZD is only a cent adrift from the current trading level. Whether or not nothing happens in the next 12 months either remains to be seen, it is not impossible to imagine.
CAD: The Loonie has fallen by 2.5% against sterling in the last 12 months but has gone almost nowhere in the last two years. The GBP/CAD exchange rate has averaged 1.5901 over that period; today it was trading scarcely more than a cent away from that level at 1.6030. Although history can provide no sure guide to the future, it is possible that another 12 months of stability could be on the cards.
EUR: Whilst it would be premature to brand the latest EU agreement a failure, it has failed to convince investors that a resolution to Euroland's sovereign debt crisis is at hand. The European Central Bank refuses to buy government bonds on the scale necessary to support them. Instead, it is printing money for the use of commercial banks, which can now borrow as much as they want for three years. The ECB hopes they will use it to buy government bonds but there is no guarantee they will.
USD: The dollar did better than sterling over the last seven days but not by much, hardly more than half a cent. More intriguingly, and contrary to the popular perception, the net movement of sterling/dollar over the past 12 months is as close to zero as makes no difference. Both countries have a problem with over-indebtedness but both also enjoy a triple-A credit rating and have control over their own currencies. For the moment, investors are comfortable with them both as safe havens.
GBP:Sterling was the week's third best-performing currency behind the US dollar and the yen. With euro zone countries under threat of downgrades to their credit ratings, the pound's triple-A status gives it almost safe-haven status. Its performance over the last 12 months adds weight to that notion: Compared with its level against the US dollar a year ago the pound has moved less than quarter of a cent. There is no guarantee that stability will persist but it might.