Currency Rate:

US$/GBP - 1.568

In the spirit of Shrove Tuesday, sterling’s performance yesterday was as flat as a pancake against the euro. A lack of economic data, reduced trading volumes due to the US President’s Day holiday and the fact that many traders are holding off for data out later today meant that sterling moved very little aside from a modest 0.3% gain against the US dollar. The big news out today is the CPI inflation data for the UK, which is expected to show a rise to 3.5% from 2.9% in December. This will prompt a letter from Mervyn King to the Chancellor to explain. The Bank have stated a few times that they expect inflation to overshoot 3% in the short term before dropping off later in the year. The risk of volatility is high, as if inflation comes in worse or much higher than expected, sterling is likely to move. Get in touch to avoid losing out.

In the US, relatively little happened yesterday with the markets shut, but there is data out today in the form of the US Empire survey which will give a feel for business confidence for February. This is expected to show a small rise from last month. Similarly, a homebuilder confidence survey is expected to show a marginal improvement. Sterling is trading at the top end of recent ranges against US dollar – get in touch now if you have urgent payments.