UK's growth is comparable to that of U.S., and inflation is similar to that of Euro zone. Positve economic momentum will be shown through the central bank rates sooner or later.
BoE recently indicated that it will raise rates at some stage, but will rush into it. The timing still remains to the question posed by most of the market participants.
Sterling, as a result is mainly reflecting speculation about the timing of rate hikes, sooner rather than later? As the ECB disappointed last week the market view is likely to tend towards "probably a little earlier after all" again now.
"Investors who expect that are likely to feel confirmed by strong industrial production data today (Commerzbank: +0.3% mom, consensus: +0.1%). The ECB induced rise to above 0.72 in EUR-GBP is likely to be rather short-lived", says Commerzbank in a research note.
GBP/USD is currently trading at 1.5043, while EUR/GBP at 0.723.


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