Sterling gains ground against the euro

The pound strengthened sharply against the euro yesterday by 1.52 cents (1.34%) to finish the day at 1.1537.

• In early trading yesterday sterling strengthened against the euro, after European Central Bank Governing Council member Erkki Liikanen said the bank’s key interest rate could go lower.
  
• Improved optimism surrounding the UK economy and financial sector drove sterling over a cent higher against the single currency mid-afternoon. Investor appetite for riskier assets like the pound were also helped by global equity market rises, buoyed by much better-than-expected US consumer confidence figures released on Tuesday.
  
• Finally, improved UK mortgage approval and service sector data also contributed to sterling’s strength yesterday.
  
• In trading so far today the pound has pared some of the gains it made yesterday, as investors take stock before important UK data out later today. At 11.00 BST UK CBI Realised Sales figures are due. There are no major announcements out in the eurozone today.