Sterling weakens sharply vs. euro despite jobless figs

Sterling weakened by 0.97 cents (0.82%) against the euro yesterday to close the day at 1.1761.

• In early trading yesterday sterling fell by over a cent against the euro, despite better-than-expected UK Claimant Count figures out mid-morning. Those claiming unemployment benefits rose by 39,300 last month, much less than the 60,000 increase analysts had been expecting.
  
• Instead, sterling weakened on the back of the latest Bank of England minutes, which revealed policymakers felt there was no reason to change their medium-term outlook on the economy and inflation despite more encouraging data out recently. The bank voted unanimously to keep interest rates on hold and not extend their quantitative easing program.
  
• Falling UK equity markets provided little respite for the falling pound yesterday. The FTSE 100 eventually finished the day down 50.11 points (1.16%).
  
• In trading so far today the pound has continued its slide against the euro, despite UK Chancellor Alistair Darling’s announcement last night that the recession was easing.
  
• There are no major announcements due in the eurozone today, whilst in the UK Retail Sales (MoM) are out at 09.30 BST.