Sterling hits 8 month low against the Euro
14.03.2007
Sterling
hit an eight month low versus the Euro and fell against the Dollar and the Yen this morning as increasingly risk averse investors continued to unwind carry trade positions in the high yielding Pound. With Sterling benefiting from the carry trade in recent months, it has also proved the easiest currency to sell when looking to crystallise a profit.
However, there was some respite for Sterling this morning when UK Average Earnings picked rose more than expected to 4.2% in the three months to January. The market had been expecting a 4.1% increase and consequently the MPC are likely to remain alert to the fact that higher wages could fuel above target inflation.