Falls for Sterling show economy still under pressure

The latest HiFX Global Currency Moves Report reveals Sterling fell against all major currencies last month indicating that the rallies enjoyed in June and July are over.

Recent figures from the UK showed a 13 year high in unemployment and this had a negative effect on the pound. In contrast, we saw positive news from Europe as Germany and France exited recession whilst encouraging words from America's Ben Bernanke also helped keep the US firm.

However extreme volatility in all the financial markets has meant that trends can change very quickly and therefore nothing should be taken for granted.

As well as sterling falling, last month was also extremely volatile, particularly among the ‘commodity currencies' (NZD, AUD and CAD). GBP/EUR held its spot as the least volatile currency pair in our table for a second month running, but as always, we would remind anyone not to get complacent during these unprecedented times.

Mark Bodega, Director at currency specialists HiFX comments: "Throughout the first half of 2009, the currency markets experienced acute volatility as the ongoing global economic crisis deepened. Despite some positive news in the UK, such as better than expected retail sales figures and encouraging signs from the manufacturing sector, rising unemployment and worrying statistics about the state of the Government's finances continue to put pressure on the pound.

As the summer draws to a close it has never been more important to protect yourself against currency volatility. Anyone exposed to the currency markets, should maintain a cautious approach in these uncertain markets and fix costs where possible from the outset."