The US dollar slid by as much as one per cent against Sterling after the US Federal Reserve decided against raising interest rates and cited China’s economic risks as a key reason for delaying. Federal Reserve’s chair, Janet Yellen, said that despite a strengthening US economy, heightened concerns about slowing growth in China could put further downward pressure on inflation. Next month China will release its latest five-year economic plan which should play an important part in influencing currency volatility. The euro has appreciated by over four per cent against the pound since late August as China’s problems weaken the US dollar and boost demand for the euro.

Euro

This Sunday Greece will hold yet another election with investors keen to see if Greek political uncertainty is still an important influence on the euro. Thursday’s US interest rate decision and subsequently weaker US dollar has allowed the euro to rally to a three-week high.

Sterling

GBP/USD has now risen by over 300 points (3 cents) over the past 48 hours after a somewhat dovish US central bank held interest rates unchanged. Wednesday’s strong UK wage growth data has helped bolster the rally as attention now turns back to UK politics. Britain’s Scottish National Party is expected revive the Scottish Independence debate. GBP/EUR is trading near its lowest in three months.

Swiss Franc

The Swiss franc appreciated by more than one per cent against the pound and has risen by 1.7 per cent against the US dollar in the past three days after the Swiss National Bank revealed no major surprises on Thursday. The SNB left its negative interest rates unchanged following its latest policy meeting despite saying the franc remained “significantly overvalued”. There had been some concern that the SNB would ramp up its franc-negative measures.