The pound made some positive moves during trading on Tuesday as it reached an 11-week high against the Euro with a rate of 1.1235 according to the Foreign Exchange Market. Along with this, the currency also took off against the US Dollar reaching 1.3393. This was buoyed by news that factory activity had increased to a new two year high, indicating that the UK could make a quick economic recovery. Despite this, the Bank of England could change all of that depending on how the speech from Ben Broadbent goes.
The Euro also ticked higher yesterday even though the Eurozone fell back into deflation last month. As the US Dollar weakened, the Euro pushed higher although as the day came to a close, it did fall back again. However, this might indicate that the economic recovery has stuttered somewhat while the stimulus package has not reached its inflation target of 2%.
Tuesday was not a productive day for the US Dollar after investors continued to avoid the safe-haven currency. It’s looking likely that interest rates are going to remain near to zero for longer than expected which is going to limit the appeal of the currency.