Sterling continues its rise against the euro

Sterling continued its rise against the euro yesterday, finishing the day at 1.1315.

• In early trading yesterday the pound climbed against the single currency, as the FTSE 100 recovered from initial losses to record a 0.9% rise mid-morning.
  
• Sterling also gained on the back of Friday’s much worse-than-expected eurozone GDP figures, which revealed a 2.5% contraction in the region’s economy for the first three months of 2009.
  
• The pound’s early gains were also extended yesterday after more upbeat housing figures released by property website Rightmove. Following April’s 1.7% increase, this month saw a 2.4% rise in asking prices for homes in England and Wales, the largest monthly increase since February 2008, although the group did say it should not be mistaken for a housing market recovery just yet. Instead, it said the figures reflected a mixture of “ambition, optimism and necessity”.
  
• In the afternoon the pound continued to strengthen against the euro, as London equity markets rose markedly, driven by strength in banking stocks. News that Lloyds Banking Group chairman Sir Victor Blank would retire by June next year was welcomed by investors, with shares in the company finishing up 9.9% as a result. The FTSE 100 as a whole closed up 2.26%.
  
• In trading so far today the pound has continued its rise against the single currency, although investors are eyeing closely two important pieces of data released in the UK and eurozone later today.
  
• First, in the UK Consumer Price Index figures are due at 09.30 BST, shortly followed in the eurozone by the German ZEW Economic Sentiment Survey at 10.00 BST.