Sterling weaker ahead of interest rate decision

Sterling was lower in relation to the euro on Tuesday as some analysts said that the Bank of England could choose to cut interest rates later this week, even though most analysts still believe that the Bank will hold rates at their present level.

In early afternoon trade in New York it took €1.3945 to buy a pound against the €1.4073 it took on Monday afternoon, while the US dollar was also slightly stronger at $2.0580 to the pound.

The Swiss franc strengthened as investors rejected risk after comments from a European Central Bank board member who said that the continuing US housing crisis could hurt the Eurozone’s economy.

The Swiss franc was trading at SFr1.1177 to the US dollar in early afternoon trade in New York, while it was at SFr1.6494 to the euro and at SFr2.3001 to the pound.

At the same time, the flight from risk also strengthened the yen.

In New York at early afternoon it took ¥109.8750 to buy a US dollar, better than the ¥110.4350 it took to buy a dollar at about the same time on Monday afternoon, while it cost ¥226.1175 to buy a pound and ¥95.96.48 to buy an Australian dollar.

On the other hand, the yen was trading at ¥162.1534 to the euro against Monday’s early afternoon level of ¥161.9749 to the euro.

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