Sterling slipped marginally against the euro yesterday as traders adjusted positions ahead of the Easter break and the euro recovered from a 1% loss against sterling on Monday. The pound was up 0.3% against the US dollar as bets on an interest rate hike by the Bank of England were up ahead of today’s Bank of England minutes. Sterling has traded in a range between $1.60 and $1.64 for two and a half months as investors speculate whether more Bank of England officials will vote for monetary tightening to contain inflation. The minutes are released at 9:30am so ensure you don’t lose out by speaking to a trader as soon as possible.

In the euro zone, solid data in the region helped the euro recover against both sterling and the US dollar after the worst day in 5 months on Monday. Concerns over Greece remain and should keep the single currency under some pressure with Germany not expecting Greece to make it through the summer without defaulting. There have also been concerns that Greece’s deteriorating public finances will cause a dangerous domino effect causing banks to collapse, threatening the viability of the single currency. Call in now for a live exchange rate.

In the USA, Monday’s credit rating outlook downgrade has seen capital being shifted away from the US towards other markets, with concerns over fiscal consolidation leaving the UK as a more attractive proposition. The UK government has come under fire for its tough programme of spending cuts, but these finally seem to be being recognised by the financial markets. The USA and euro have suffered in the past few days as a result of concerns over the lack of similar measures in these regions. There is home sales data released today so call in now for a live exchange rate.

Elsewhere, the Japanese yen gained across the board due to concerns over sovereign debt problems in Europe and the US that has seen investors steer clear of ‘carry trades’ (i.e. where investors borrow cheap yen and invest in higher yielding currencies). In addition, the Canadian dollar performed well against the US dollar, gaining by 0.7%.

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