Currency Rate:

EURO/GBP - 1.148

In the spirit of Shrove Tuesday, sterling’s performance yesterday was as flat as a pancake against the euro. A lack of economic data, reduced trading volumes due to the US President’s Day holiday and the fact that many traders are holding off for data out later today meant that sterling moved very little aside from a modest 0.3% gain against the US dollar. The big news out today is the CPI inflation data for the UK, which is expected to show a rise to 3.5% from 2.9% in December. This will prompt a letter from Mervyn King to the Chancellor to explain. The Bank have stated a few times that they expect inflation to overshoot 3% in the short term before dropping off later in the year. The risk of volatility is high, as if inflation comes in worse or much higher than expected, sterling is likely to move. Get in touch to avoid losing out.

In the Euro zone, the German ZEW survey of consumer confidence is released at 10am – this is expected to show a considerable drop in sentiment reflecting concerns over Greece and sovereign debt and also the fact that growth unexpectedly stalled for the fourth quarter in the region. This could cause euro weakness – especially against the US dollar. Let us help you take advantage.