Sterling fell to a 5 month low against the euro yesterday as euro-region inflation data left investors betting that the European Central Bank will raise interest rates before the Bank of England. Expectations have been that the ECB will start hiking rates in April, and yesterday’s data cemented this. Analysts now feel that the euro could test last October’s highs of 1.11/£1 against sterling as sentiment improves towards peripheral European countries and UK data disappoints. Against the US dollar sterling hit a high of $1.6152/£1, the strongest since March 24, boosted by data that showed house prices unexpectedly increased. Out today we have manufacturing sector activity data, so call in now for a live exchange rate to ensure that you don’t miss out.

The euro performed well against other currencies on Thursday, after inflation data essentially confirmed rumours that the European Central Bank would raise interest rates in its next meeting. The euro reached a ten month high against the yen of ¥117.90/€1, the highest since May 2010. Analysts feel that the euro will stay strong in the short term, but towards the end of the year it should return to more normal levels. Out later today, there is European unemployment data, so call in now for a live exchange rate.

The US dollar rose to a three-week high of 83.21 yen before running into selling by Japanese banks and foreign players. This return to more ‘normal’ levels of strength is a sign that the panic from the recent earthquake/ tsunami is beginning to die down. Following comments earlier in the week regarding US monetary policy from senior US officials, the prospects of higher interest rates in the US mean that Japan and the USA’s interest rates are likely to take very different paths. Out later today, we have key US unemployment figures in the form of non-farm payrolls which could see significant volatility.

Elsewhere, following a stress test of Irish banks yesterday, it was revealed that Ireland needs €70bn to protect its banks from future shocks. The government promised a radical overhaul of the sector and promised a radical overhaul of the sector. Call in for a live exchange rate.

Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/