Improvements in UK public sector borrowing figures retained sterling strength in yesterday’s morning session. A rare string of positive UK data continued in the form of mortgage lending figures which rose by 6% in February. Nevertheless, the opening of the US market saw the dollar regain some of its earlier losses and left cable at daily lows at the end of the session.


Conflict over Greece’s recovery continued with rumours that a bail-out by the International Monetary Fund may be required because of Germany’s ongoing resistance to dealing with the matter. Such a scenario would adversely impact on the euro as it would prompt questions over the relevance of the EU in this situation. As a result the euro fell to three week lows against sterling and also slipped against the greenback.


Across the pond, US consumer prices in February showed no change from the levels experienced in January. Along with the announcement of a core inflation rate of 0.1%, this supported the FED’s announcement earlier in the week that interest rates are likely to remain low for a significant length of time. In addition, a decrease in unemployment claimant figures helped the US dollar to claim back some of the previous day’s losses against sterling in the afternoon.


Little or no significant data is expected today with the only focus likely to be on Eurozone consumer confidence due out in the afternoon.