Sterling falls ahead of Thursday’s Bank of England meeting

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Sterling had a tough day yesterday, getting some bad press and losing out across the board. It started the day/week fairly well, reaching the high set the previous week at £/$ 1.6343 however, once it reached that level there was a sharp sell off from the 13-month high, ending the day nearly a cent and a half lower.

Against the Euro, Sterling gave up the ghost even earlier in the day falling half a cent and only consolidating when it hit the late January low of £/€ 1.1577.

It seems investors wanted to concentrate on the "promise" of a Eurozone interest rate increase next month. Sterling was clearly bound to come second in that argument because of investors' near-certainty that the Bank of England will make no change to interest rates this week and doubts persist that any move in interest will come in April.

There was very little data yesterday; Eurozone investor confidence went up from 16.7 to 17.1 with very little reaction. There was no reaction either to weak sales figures from the British Retail Consortium or a five-point improvement, to -26, in the RICS house price balance which came out at midnight.

There is also very little data due today so we'll be paying attention to see if Sterling can turn around yesterday's poor performance ahead of the Bank of England meeting on Thursday.

*Our final thought goes to poor Bob Diamond, head of Barclays Bank. As head of a top-100 global corporation, Bob must be a little disappointed that he gets a bad press for earning £6.5 million, especially as it is less than at least a dozen football players.