23rd March 2011
Good morning. Inflation data yesterday was higher than expected, and this pushed the pound higher against the Euro slightly, but to a 14 month high against the US Dollar. We may see slight further gains after the BoE minutes this morning, but the Budget at Mid-day may take the wind out of Sterling sails. At 08:30am this morning rates are as follows:
Yesterday inflation figures were above forecast, and more than double the governments target of 2%. The news increased the chance of an interest rate hike in the UK in the coming months. Against the Euro gains were limited due to the fact the EU are expected to raise rates next month.Against the US Dollar though we hit a 14 month high. Most analysts think Sterling is overvalued though and so we expect it to drop back away in the coming days.
Boe Minutes at 09:30This morning we'll see the minutes to the recent BoE decision to hold rates. The minutes contain discussions, differences of view, and crucially how each of the 9 member committee voted. If more than 2 voted for a hike, this may give Sterling a slight push higher when released at 09:30am.
How will the budget affect rates?Markets await the UK government's 2011 Budget, due to be unveiled today at lunchtime, which will seek to bolster faltering growth without compromising on a tough austerity programme put in place to get public finances in order.
Labels: Best Exchange Rates, BoE Minutes, Budget, Inflation