Sterling rose on Thursday after a slight improvement in inflation expectations, though analysts still expect economic and political concerns to keep the pound under pressure ahead of an upcoming general election. A survey from the Bank of England yesterday showed expectations for inflation over the next 12 months rose slightly, which helped underpin sterling, albeit temporarily.


Meanwhile, the dollar fell against the yen and euro on Thursday after the U.S. trade deficit for January came in narrower than expected as a result of weak exports and sharply weaker imports. Nevertheless, according to Standard & Poor’s the US dollar is still the most important world currency, however, they warned that rising levels of US debt and dependence on overseas investment for finance pose risks to the currency’s primacy.


Today sees little significant announcements from the UK. From the eurozone we have the industrial figures for January with the expectations on a 0.70% increase on month. Still, today’s highlight will be the retail sales figures from the States that are due out this afternoon, expectation are for slightly negative number, but there could be a surprise to the upside.