020 7898 0500Currency markets are surprisingly stable given the worries over the situation in the Ukraine and the “wish” of the ECB to see the euro weaken. In the UK inflation fell to 1.6%, the lowest level since November 2009. The UK currency had a rocky start, falling in advance of the release of the UK inflation figures, but soon appreciated to a higher level than it opened at, and continued to improve throughout the afternoon. With the markets largely ignoring the inflation data, sterling improved against both the euro and US dollar as the situation in Ukraine looked to be escalating, with the deployment of troops to combat protestors. Strong inflation data from the US in the afternoon caused the dollar to recover, although sterling held on to maintain its high levels. Today sees the release of the unemployment rate from the UK, which is expected to remain at 7.2%. Any significant variation from this level, however, may result in movement for sterling.
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