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Posted July 18th, 2013 by Charles Purdy

Sterling benefits from BoE surprise | Smart Daily Currency Note

GBP/EUR – 1.1574

Sterling appreciated sharply yesterday morning in response to a double dose of positive data. The Monetary Policy Committee meeting minutes revealed a surprise 9-0 vote in favour of maintaining the Bank of England’s quantitative easing target instead of increasing it. This caused sterling to jump over a cent against the US dollar and euro as many key figures expected the vote to show several members (including the new Governor Mark Carney) to vote in favour of increasing the quantitative easing program, rather than the unanimous decision against this that was revealed. Performance was further boosted by data showing that unemployment claims dropped by over 20,000 in June, a much greater reduction than predicted. Sterling continued to perform well yesterday afternoon, trading at 1.16 against the euro and hovering above 1.52 against the US dollar. This morning sees the release of monthly UK retail sales data, which has the potential to either check or reinforce today’s optimism should figures differ significantly from predictions. Call in now to stay on top of continuing market reaction.

It seems that the euro is not master of its own destiny this week as it continues to play a largely reactionary role whilst events in the UK and USA continue to dominate. The euro weakened against sterling considerably yesterday morning and continued to decline throughout the day. The euro experienced more mixed fortunes in its performance against the dollar with reasonable movement seen in both directions, but little net movement, by the close of trading in London. Eurozone current account data, which details the difference in value between imported and exported goods may play some role in the euro’s performance today, as might Spanish 10-year bond data, but it is likely that events elsewhere may continue to dominate the headlines and drive market movement. Call in now to keep pace with developments and to get a live rate.

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