Sterling hit a six month high against the euro today after a higher than expected rise in UK inflation data and mixed economic figures from the eurozone strengthened its position.
The UK currency hit 1.14750 versus the euro leading some experts to suggest it could break the significant 1.1488 mark in the coming weeks and could strengthen as high as 1.1750.
A key factor in today’s rise was the announcement of the UK’s CPI data which registered an increase of 1% from an annual rate of 1.9% in November to 2.9% last month – the biggest jump in the annual rate from one month to the next ever recorded.
In addition, a weaker than forecast survey of investor and analyst confidence in Germany, plus ongoing concerns over the Greek fiscal deficit, have hampered the euro.
Mark O’ Sullivan, director of dealing at foreign exchange firm Currencies Direct said: “The current sterling rally looks like it may have the potential to move higher over the coming weeks.”
“Although there are still considerable worries concerning the UK, both in its fiscal position and potential change of government, there is no doubt January has proved the month to be long on sterling.”
