Currency Note Sterling

Sterling up against the euro as the ECB goes for broke

By Ricky Bean January 23rd, 2015

Sterling hit a fresh 7-year high against the euro this week as the ECB announced that it would purchase €60 billion worth of bonds per month until September 2016 at the earliest. There was also a knock on effect against the US dollar with sterling falling to its lowest level against it since mid-2013.
The other key matter of note was the release on Wednesday of the minutes from the last Bank of England (BoE) policy meeting, which revealed a unanimous decision to leave interest rates on hold at 0.5%. This meant that two members who had previously been voting for an increase in interest rates had become more cautious following the fall in inflation and the markets have concluded that the BoE may be further from raising interest rates than previously thought.
Yesterday’s ECB announcement is still likely to dominate markets today. However, retail sales data from the UK will provide interest to investors, with a 0.6% contraction predicted throughout December.