Daily Currency Report
Overview
Markets were dominated by the release of the UK's CPI, which came in at three per cent, and the stronger than expected German ZEW. Both releases have led to the market pricing in rate rises over this coming year.
GBP
The sterling fell after data showed that British inflation was above consensus forecasts but not as high as many had anticipated given the BoE's surprise interest rate increase last week.
USD
The US is expected to show that there has been a rise in the Producer Price Index reflecting higher crude oil and gasoline costs that have since retreated. Generally, the outlook for inflation is much improved due to slower growth in the economy in the last few quarters.
EUR
The euro rose against a broadly weaker dollar, supported by a robust survey of German business sentiment. The eurozone is widely expected to increase interest rates in March from the current 3.5 per cent.
JPY
The yen slid to a 13-month low against the dollar as an array of media reports stated the Bank of Japan was now likely to hold interest rates at 0.25 per cent, dampening widespread expectations for an increase.