GBP/EUR drops. BoE minutes today.

Sterling slipped against the Euro yesterday, with the single European currency gaining broadly as the market took the view its recent sell-off had gone far enough for now. Analysts have said that concerns over the fiscal health of Greece and other peripheral euro zone economies may have gone too far, and that the currency was oversold. Rates @ 08:30am are as follows:

  • GBP/EUR 1.1461
  • GBP/USD 1.5797
  • GBP/AUD 1.7509
  • GBP/NZD 2.2344
  • GBP/CAD 1.6468
  • GBP/CHF 1.6827
  • GBP/ZAR 12.073
  • GBP/JPY 142.70
  • GBP/NOK 9.2133
  • EUR/USD 1.3778

UK Inflation
The UK inflation rate rose to 3.5% in January – the fastest annual pace for 14 months – from 2.9% the month before, official figures have shown. Despite the rise, it’s unlikely the Bank of England will raise interest rates due to the economic position of the UK, and so the rise in inflation has not caused any strength in the pound. You can read a full report on the inflation situation on the BBC site here.

Bank of England Minutes
A big week of UK data releases continues with Today’s minutes from the BoE’s policy meeting earlier this month, when the central bank said it would not increase its asset-buying programme.
Last week, King had said it was far too soon to say quantitative easing was finished, and so markets are still uncertain on whether QE is over.

Analysts said the vote could be closer than the 8-1 market consensus to pause the asset buying programme, which would put pressure on sterling. “I think a 6-3 vote would really get sterling wobbling again”, said RBS’ Robson. If the vote is split, then expect Sterling to weaken, as it signals that the policy makers are unsure of what direction to take, and this lowers confidence among investors. They ar then less likely to invest in the pound, and Sterling may well fall as a result.

Employment figures are also due today, so expect rates to change around 09:30am when the data is released. You can keep up to date with the days developments on our Twitter page, along with regular rate updates.

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