Strong UK inflation data and a weak single currency enabled the pound to push higher yesterday

The pound continued to climb against the single currency, pushing its two-month high up to 1.1319 in the wake of positive UK inflation data.

• Sterling opened the day on a positive note as investors digested the words of BoE policymaker Andrew Sentence, who said that Britain is returning to growth but risks stoking inflation if it keeps stimulus measures in place for too long.
  
• His comments supported claims that the last installment of £25billion to the asset purchase scheme would be the final expansion.
  
• Sterling extended its gains following positive UK inflation data, which came in higher-than-expected in October.
  
• UK consumer price inflation rose 0.2% in October, exceeding forecasts for a 0.1% rise. This took the annual rise in CPI to 1.5%, up from 1.1% in September.
  
• In the euro zone, data revealed a positive trade balance for September. The figure of 6.8 billion represents a significant improvement after August's disappointing deficit, and shows a clear resilience in the export market.
  
• However, the data had little impact on the euro, which suffered after ECB Trichet welcomed Bernanke's remarks on a strong dollar.