Sterling has a good day following an encouraging CBI survey

Following the indecision at the Eurozone finance ministers' meeting on Tuesday thankfully there has been a major breakthrough in the struggle to save the Euro. Gordon Brown says there will be "a major crisis in the euro area". Only one thing stands in the way now - Nick Clegg's pledge to give the Euro the unanimous backing of the Lib Dem's.

For currency exchange brokers, The Euro was deemed to have performed fair on Wednesday,  holding it's own against the Australian Dollar, but it was Sterling that was one of the best performing currencies. It was the Confederation of British Industry's (CBI) monthly survey of manufacturers that ask's how they see the next three months developing. The results were that 27% of companies reported orders above normal in December and 31% below, the resulting -4% is the strongest since 2008.

On the back of this, Sterling gained a cent on the Euro to reach a high of £/€ 1.1953 for buying and selling Euros. Against the US Dollar, the Australian Dollar, South African Rand and New Zealand Dollar, it was up.

Sterling's gain against the New Zealand Dollar could be attributed to the Reserve Bank of New Zealand's decision to keep interest rates steady at 3% overnight as predicted. The decision itself did no damage to the NZ Dollar, it was governor Alan Bollard's comments that sent it lower. He warned that "interest rates are now projected to rise at a limited extent over the next two years then we expected in September". It is our view that rates will go up because tax changes will send inflation higher, but the increases will come more slowly than previously estimated.

Although there is quite a lot of data out today we don't expect it to have much impact on the market. The Bank of England will leave interest rates and quantitative easing unchanged; the UK's trade balance could have an impact if it is a long way from expectations; US jobless claims won't have an impact unless they are very disappointing.

If the markets believe that further QE if off the Bank of England's agenda, investors may decided to buy the Pound. We'll see.