Sterling benefitting from rate hike expectations
Sterling managed a small advance yesterday morning, benefitting from expectations that the Bank of England rate hikes and hopefully leading global investors to switch to currencies with the promise of higher interest rates. The Pound settled close to 1.3550 against the dollar while the Euro retreated to around 1.1860.
Markets continued to monitor ECB rhetoric as one Council member stated that recent inflation data has shown a surprising upwards trend, although inflation is not likely to remain above 2% over the medium term. Markets will also be monitoring comments from Bank of England chief economist Huw Pill today for further guidance where interest rates might go from here.
Sterling opens just above 1.3550 to the dollar in early Europe with little change against the Euro.