Sterling continues to trade in the red against the euro

A rally in equity markets was unable to prevent the pound from sliding for the third consecutive day against the euro yesterday, closing down at 1.1365.

• In early trading yesterday the pound held steady against the single currency, with minor data going relatively unnoticed, as the upcoming BoE’s rate decision prevented any significant movement.
  
• However, strong European stocks were unable to rally the pound, working instead to the benefit of the euro, which edged up another 0.2%.
  
• The pound is trading marginally lower again today, as investors await the BoE’s interest rate decision announced at 12:00BST, which could have a significant impact on the markets, as investors are able to gauge the depth of the UK economic recovery.
  
• Certain analysts are saying that there is a chance that quantitative easing may be extended, a policy which the minutes from the last meeting revealed Mervyn King was in favour of, which would risk sending the pound into another downward spiral.