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According to Reuters, the euro lost 0.3 per cent versus sterling to reach 87.49p this morning, although it remained above its 21-day moving average of 87.39p. Meanwhile, the pound held firm against the US dollar, standing at $1.6328.
"A rise in rates today is very unlikely, as little has changed since the March meeting, but [there] is still an outside chance," analysts from Lloyds stated. "Sterling still looks vulnerable after weaker than expected industrial production data yesterday helped reduce expectations."
The ECB, on the other hand, is widely expected to hike the eurozone base rate by around 25 basis points following weeks of hawkish rhetoric from president Jean-Claude Trichet.
Earlier in the week, the Organisation for Economic Co-operation and Development stated that the ECB's rate-setting panel had "good reasons" for increasing interest rates to ward off inflationary pressures.
Posted by Clive Arneil
