Sterling saw 2 month highs against the dollar yesterday as economic concerns pole axed the Fed’s efforts of helping the US economy. New increases in oil prices and continuing worries about inflation and the state of the global financial sector played out throughout the day and the greenback was never in positive territory against its major crosses.

The weak dollar came in handy however as without sterling could have been in the same position. Mervyn King, in testimony to the Treasury Select Committee, suggested that a rate rise in the UK in the coming months was unlikely. He also aimed a veiled swipe at critics stating that hiking rates to gain credibility was not a ’serious’ way of fighting the inflation problem.

GBP/EUR continues to trade in and around the 1.2630 mark as a lack of data from either economy weighs.

 Have a good weekend.

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Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice.Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms.