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Sterling hits low as inflation figures lower than expected

Published:  13 April, 2011

Sterling hit a low of €1.1233/ £1 against the euro yesterday as inflation figures came in lower than expected.

Sterling hit a low of €1.1233/ £1 against the euro yesterday as inflation figures came in lower than expected. 

Currency rates - April 13

EURO/GBP - 1.1223

US$/GBP - 1.6281
- 1.4617
- 1.5638
- 1.5509
- 10.9550
- 136.856
- 12.6631
- 2.0608

SEK/GBP - 10.1825
- 1.4509

It left investors questioning the prospects for an interest hike in the UK. This has widely been regarded as a positive though, as the UK needs inward investment from overseas in order to get back on track. A weak pound will help achieve this aim and as such, this should be seen as a positive. Figures released yesterday showed that UK exports had increased and the trade deficit had narrowed - all good news for the economy. Released today, we have UK unemployment figures.

The euro rose to a new five-and-a-half month high against sterling in early trading this morning, as the outlook for interest rates in the UK and euro zone continues to diverge. Many analysts expect further hikes from the ECB - possibly before the Bank of England and as such this has drawn demand for the euro. The euro dropped slightly against the US dollar for a second day as the IMF European Commission met in Lisbon to discuss the €80bn bailout of Portugal. Industrial production figures are released later so ensure you are protected.

Against the US dollar sterling hit a low of $1.6227/£1 - off a 15-month high hit last week of $1.6430 - following the drop in UK Consumer Price Inflation. There is a wide array of retail sales data released today in the USA.

The Japanese yen, US dollar and Swiss franc strengthened after more earthquakes shook buildings in Japan and after the country raised the nuclear severity rating that began last month, reviving demand for the safer haven assets. The Australian dollar fell the most in almost four weeks against the yen as Asian stocks slumped, damping demand for higher-yielding assets.

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