The pound has strengthened against the euro and the dollar this morning, breaking key resistance levels. Markets will now be watching to see if sterling can maintain this strength throughout the day and close above these levels.
Sterling was boosted yesterday by ‘hawkish’ comments from the Bank of England who indicated that interest rates could be increased soon.
The euro appears to be taking its lead from dollar dynamics but is slightly stronger this morning. Speaking yesterday, Klaas Knot, the Dutch Governor, argued a more ‘hawkish’ stance on eurozone inflation to the majority of his European Central Bank counterparts, but this had little impact on the euro.
In the US, PPI figures reached their highest level since before 2010 and initial jobless claims fell to a new pandemic low. Markets will now be watching today’s retail figures.
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