A steady day for sterling saw it trade within broad boundaries on Tuesday, as Governor Carney of the Bank of England (BoE) vowed that policy makers would look beyond the current low inflation when considering interest rates. With mounting labour-cost pressures increasing the urgency for an increase in interest rates, sterling has found itself well-supported throughout February. This positive sentiment was echoed by Mark Carney, who emphasised that the impact of oil and food prices on inflation were temporary. Sterling strengthened back to a seven year high against the euro on the back of these comments, before slipping again throughout the afternoon; ground was also regained against the US dollar on Tuesday afternoon when Federal chair Yellen warned that low wage growth demonstrated significant slack remaining in the US labour market.
Another interesting day lies ahead, with the central bank heads of the UK, US and Eurozone again due to speak. As with yesterday, investors will be listening intently for any insight into monetary policy, whilst euro investors will be particularly keen to hear of any developments to the ongoing Greek debt crisis when European Central Bank President Mario Draghi speaks.