In a complete reversal of yesterday, sterling started the day on a low hitting €1.1359 against the euro, but has since rallied.
Sterling was lower against almost all of its major peers this morning as investors braced themselves for the outside possibility that the Bank of England would announce a fresh round of monetary easing. However, as was widely expected, the interest rate remained at 0.5% and no more money was “printed.” In fact, slightly better than expected UK manufacturing data has helped the pound push upwards this afternoon as it rose to a daily high of $1.6016 against the greenback and comfortably back above €1.14.
In other news, the dollar fell to a fifteen year low against the yen and the weakest in more than eight months against the euro amid growing expectations the Fed will expand credit easing to sustain the US recovery. Look out for the US non-farm payrolls tomorrow, which are likely to have a significant impact on the Fed’s next policy decision in early November.
