Sterling is once again higher this morning after a combination of strong economic data and hawkish comment from a member of the MPC.

Industrial production rose by 0.4% in December which supports the strong manufacturing PMI we saw in the first week of January. These combined should be able to bump our GDP reading upwards come the end of the month.

The NIESR GDP estimate was released overnight and showed that the UK has, technically speaking, moved out of recession. The economic think tank’s number came in at 0.3%; we would hope for an official number in that area when it is due on the 26th January.

The bullish comment for sterling came from Andrew Sentance. He is a member of the MPC and a renowned hawk. Speaking in an interview yesterday he stated that an interest rate rise may be needed some time this year in the UK and that the Bank of England’s quantitative easing mechanism must finish in February. Mr. Sentance is one of the more hawkish of members and his comments must be taken as such. Although sterling has risen off the back of these words I think those gains may be lost today.

Commodity currencies have managed to stage a slight fight back overnight as Wall St ignored stock market falls in Asia. AUD, NZD and CAD have all finished Asian trade higher this morning.

Data today is dominated by the ECB announcement. We expect no change in rates and no change in language from Trichet. Markets will be looking to see however if any rebuke is directed towards Greece in light of its debt issues. The press conference is at 13.30 GMT. Other than that we have US Advance Retail Sales at 13.30 and Business Inventories at 15.00