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It has been revealed that speculation the European Central Bank may have to increase its interest rates to help out the single currency played a part in the latter's rise, Reuters reports.
But Adam Myers, senior currency strategist at Credit Agricole, stated he thinks the pound will tighten when interest rate expectations stabilise.
He added: "We should get another knee-jerk higher in euro/sterling as interest rate expectations in Europe catch up with expectations in the UK."
This comes after the Bank of England decided to keep its interest rate at a record low 0.5 per cent, it confirmed yesterday.
What's more, there was positive news for sterling against the US dollar as the former rose by 0.2 per cent today.
This comes after the pound was down against its US counterpart on Wednesday following news of the biggest UK trade deficit since records began.
Posted by Greg Secker
