Pound finishes down against the euro

The pound weakened by 0.72 cents (0.62%) against the euro yesterday, to close the day at 1.1518.

• In early trading yesterday sterling hit a six-month high against the euro, as investor confidence that the UK economy may be recovering continued. A Nationwide survey showing UK consumer confidence was at its highest level for six months fuelled the pound’s early gains, as did better-than-expected UK Services PMI figures released mid-morning. It came in at 51.7 this month, well ahead of the 49.4 predicted, and also an improvement on the 48.7 recorded previously. The index’s rise above the crucial 50 mark – with a score above that level signalling growth – was a major boost to hopes of an economic recovery, with the services sector making up about 70% of the British economy.
  
• However, after lunch the pound weakened considerably against the euro, as near 2% falls on equity markets and profit-taking from the pound’s recent rally dragged the UK currency down. The FTSE 100 eventually finished the day down 93.6 points (2.09%) at 4,383.42.
  
• In trading so far today the pound has continued its slide against the euro, as investors brace themselves for today’s important announcements by t he central banks of both regions, who are due to give their latest interest rate decisions. The Bank of England will announce their decision first at 12.00 BST, followed by the European Central Bank at 12.45 BST.