Pound rises to four year high against the euro!

The Pound rose to a four year high on expectations that signs of quickening growth will prompt the Bank of England to raise interest rates again this year. The central bank’s surprise rate hike to 5.25 per cent earlier this month, followed by last week’s very strong inflation data have raised beliefs to two further rate hikes, with a back-to-back rise next month looking increasingly likely.

The currency climbed to a four year high versus the euro following an industrial survey showing house prices in January rose to a record. Against the euro, the pound rose to 0.6537, its highest level since January 31 2003. The Pound also reached a seven week high against the dollar late yesterday afternoon.

The euro advanced against the dollar on speculation a survey this week may show German business confidence rose to a record, bolstering the European Central Bank’s case for raising rates. Increased borrowing in the 13 nations sharing the euro will help raise the yields investors can earn on assets in the region.

The yen slumped to an eight year low against the Pound early this morning and held near a four-year low versus the dollar following continued pressure from both currencies since the BoJ announced they would be keeping interest rates on hold last week.

Crude oil rose this morning as Nigerian gunmen kidnapped two U.S. citizens, raising concerns that supply from the OPEC’s sixth largest oil producer may be disrupted as militants step up their attacks.

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