Pound Sterling Close to Two-Year High


Pound Sterling

The Pound surged close to its highest level in two years over the weekend as concerns that open war could occur between Ukraine and Russia increased dramatically last week. Fears of the conflict dragging on the European Union were heightened after European Commission President Jose Manuel Barroso warned that the situation was edging closer to the point of no return. Support for the Pound continues as investors speculate that the Bank of England will hike interest rates sooner than initially expected. The diverging fortunes of the UK and Eurozone economies have also lent support to the Pound.

US Dollar

The US Dollar hit a one-year higher against the Euro as concerns over Ukraine and disappointing German GDP data weighed heavily upon the single currency. The ‘Greenback’ is likely to see relatively muted trading in today’s session due to the US markets being shut for the Labour Day national holiday.


The Euro tumbled against all of its major peers as concerns over a widening conflict in Ukraine increased and as the poor economic data releases kept on coming. Data released on Monday confirmed that Germany’s economy contracted by 0.2% in the second quarter, increasing concerns that the wider Eurozone could slide into recession before the end of the year. Investors also raised their bets that the European Central Bank will introduce new monetary easing measures at this week’s policy meeting.

Australian Dollar

The Australian Dollar softened slightly against the Pound following the release of weak economic data releases out of China. Further losses for the ‘Aussie’ were restrained however, as easing inflation and strong inventory data offered some support to the domestic currency.

New Zealand Dollar

The New Zealand Dollar edged higher against several major peers after upbeat New Zealand trade data supported the currency. According to official data, the overseas trade index rose by 0.3% on a quarter-on-quarter basis, beating expectations for a decline of 2.3%. Further gains were restrained by heightened risk aversion.

Canadian Dollar

The Canadian Dollar advanced to its best level in a month against the US Dollar over the weekend after data showed that economic growth rebounded at its fastest pace in almost three years in the second quarter of the year. The currency was also benefitting from an increase in crude oil prices as concerns mounted over tensions between the EU and Russia.

South African Rand

The Rand is weaker against the majority of its major peers as emerging market currencies took a beating as investors flocked to safe-haven assets and turned away from the riskier ones. Investors are growing increasingly concerned over the conflict in Ukraine. Fears are mounting that a full-scale war could erupt between the two sides as Russian forces were accused of active participation in the fighting. The Rand was also dogged by worse-than-expected trade data on Friday, which highlighted the South African economy’s external vulnerabilities.

Disclaimer: This update is provided by TorFX, a leading foreign exchange broker, its content is authorised for reuse by affiliates.

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