Pound edged higher against the euro yesterday and has consolidated its position this morning

Having traded in the red for most of the day, the pound rebounded in the afternoon to close the day marginally up at 1.0859.

• ECB President Jean-Claude Trichet in a speech yesterday stated that the European economy will likely recover slowly in the coming months.
  
• Trichet continued, saying that it was too early for the ECB to stop pumping liquidity into the economy or to raise interest rates, which slowed demand for the single currency.
  
• Additionally, data showed that consumer prices in Germany fell faster than expected in September, which was a steeper decline than the market had looked for, capping the euro’s gains .
  
• In the UK, Hometrack Ltd revealed that UK house prices increased by the most in two years during September as confidence in the property market improved, although the news went relatively unnoticed by the market.
  
• Second quarter current account data and a revised GDP figure are out today at 09:30BST with forecasts predicting slightly improved numbers from the first quarter, which could lend support to the pound.