Pound was well supported against the euro at the end of last week, but is down again today

The pound reached a two-week high against the single currency on Friday as sentiment toward sterling improved, closing the day 0.7% higher.

• Sterling rose against the euro after a major ratings agency said Britain's top sovereign rating was under no immediate threat, although concerns about UK fiscal health remained.
  
• Moody's Investors Service said the AAA ratings of Britain and the United States were not under threat of a downgrade right now, although a worst case scenario foresaw a cut by 2013.
  
• Sterling showed little reaction to data showing British input costs rising at their fastest pace in a year in November, which added weight to the Bank of England's forecast for inflation to rise sharply in the short term before falling back.
  
• The euro was also under continued pressure with Greece and Ireland among countries in an "intolerable" economic situation that could lead to bailouts before the end of 2010.
  
• In trading this morning, the pound has relinquished its brief gains, with the price back in its mid 1.10 trade range.
  
• With little data out today, the markets may take direction from eurozone industrial production, which is expected to show a sharp fall in output following disappointing readings from both France and Germany.