Sterling Steadies

Tuesday, 19 April 2011 12:23

Sterling steadied on Tuesday after the currency came under pressure Monday on speculation that Greece would need to restructure its debt in the near future.

The euro traded close to flat for the day at 87.60 pence having fallen to an 11 day low on Monday of 87.42. Traders said the pound could be set for further gains in thin markets as positions are adjusted before the Easter break. The euro had risen to five-month highs last week on expectations that UK interest rates would continue to lag those in the euro zone.

Markets now expect the BoE to hold off raising rates until October, while another euro zone rate rise is anticipated in the next few months following inflationary comments from the ECB. Sterling was flat against the dollar at $1.6263, having fallen to a two-week low on Monday at $1.6166.

The 55 day moving average was key support at $1.6178.