EURO\/GBP – 1.1930
US$\/GBP \u2013 1.6169
CHF\/GBP \u2013 1.5570
CAN$\/GBP – 1.5968
AUS$\/GBP \u2013 1.6188
ZAR\/GBP \u2013 11.8497
JPY\/GBP \u2013 135.328
HKD\/GBP \u2013 12.6005
NZD\/GBP \u2013 2.1462
SEK\/GBP \u2013 10.4309
US$\/EURO – 1.3550<\/p>\n
Sterling\u00a0strengthened against both the US dollar and euro yesterday following another jump in consumer price inflation in the\u00a0UK. The figures showed that inflation hit 4% – up from 3.7% in December \u2013 giving rise to more and more speculation over interest rate hikes over the coming months. Financial markets had been pricing in an interest rate rise towards the second half of the year, but many feel there could be a hike as early as May. This saw sterling hit a high of $1.6169\/\u00a31 and \u20ac1.1963\/\u00a31 against the US dollar and euro on heavy buying. The Bank of England releases the latest Quarterly Inflation Report tomorrow which could see upward amendments to inflation expectations. If this happens we are likely to see sterling strengthen even further and break over \u20ac1.20\/\u00a31 and $1.63\/\u00a31, so call in now for a live exchange rate.<\/span><\/p>\n <\/span><\/p>\n In the euro zone, the single currency slipped yesterday to the lowest level against sterling in 4 weeks as rate hike expectations boosted sterling and European data disappointed. GDP figures for the region showed that the economy grew by 0.3% against an expectation of 0.4% which didn\u2019t help. In addition, German economic sentiment undershot expectations \u2013 highlighting the fragility of the region. Tomorrow is a relatively quiet day for European data but could see debt crisis related volatility.<\/span><\/p>\n <\/span><\/p>\n In the\u00a0USA, the US dollar underperformed against the euro for the first time in four days yesterday as risk appetite saw the single currency benefit, but many analysts still expect the euro to suffer. Retail sales data for the\u00a0US\u00a0disappointed, showing growth of 0.3% against an expectation of 0.6%. This saw the US dollar fall marginally, but it held above an 8 week high against the Japanese yen as\u00a0USgovernment bond rates make US dollar holdings more attractive against Japanese holdings.<\/span><\/p>\n <\/span><\/p>\n Elsewhere, the Australian dollar fell overnight as Reserve Bank of\u00a0Australia\u00a0Governor Glenn Stevens stated that interest rates were above average and that the central bank would not be raising rates for some time.<\/span><\/p>\n