Sterling surged against the euro yesterday after investor concerns over the EU summit saw sterling jump above €1.18/£1 for the first time since February as investors shed the single currency. The single currency shed 1% against a stronger pound after Friday’s EU summit failed to restore confidence that policymakers could reach a solution. The main headline for the UK has been David Cameron’s decision to veto the EU treaty on Friday and there was talk that this could isolate the UK from Europe in the long term. Despite this, many analysts expect sterling to strengthen against the euro as European policymakers struggle to implement new rules. Out later today there is inflation data so ensure you stay on top of rates and call in to speak to one of the team.

In the euro zone, the euro plummeted as analysts struggled to comprehend how the 17 euro zone nations would implement the new tougher measures agreed on Friday. Following the UK veto, it is up to the remaining countries in the EU to enact laws to entrench binding debt ceilings and punishments, but many analysts are struggling to comprehend how quickly this will address the immediate concerns over liquidity. In terms of data, there is economic sentiment data released tomorrow which is likely to have dropped on last month.

In the USA, the US dollar strengthened yesterday after investors looked to the safe haven of the currency as risk appetite plummeted. Higher yielding currencies such as the Australian dollar fell notably. Out later today there is retail sales data and the Federal Reserve’s monthly interest rate policy statement. Call in now for a live exchange rate.

Elsewhere, along with other commodity backed currencies, the Canadian dollar fell to the lowest level in December as Moody’s credit rating agency said that it would review the credit ratings of all EU nations following Friday’s summit. Call in now for a live exchange rate.

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