What’s been happening? Yesterday saw the pound largely on strong form, as markets looked for alternative stable currencies to the US dollar following the latest North American economic data. Sterling also received a modicum of support from a new survey published by the Bank of England that showed UK businesses were expecting to increase pay at an above-inflation pace this year, which would help to alleviate the strain on household budgets. GBP/EUR was on the rise, even though the latest Eurozone trade balance figures showed that exports from the currency bloc had increased by a pace almost double that of imports, helping the overall surplus rise past forecasts of €22.3 billion to hit €23.8 billion. Additionally, the day’s three speeches from officials at the European Central Bank (ECB) contained nothing to get markets excited about the monetary policy outlook for the currency bloc. While much of yesterday’s US economic data disappointed forecasts, even the figures that performed better-than-expected weakened the US dollar. GBP/USD rose after a stronger-than-expected uptick in producer prices, meaning manufacturers may soon have to start charging more for the goods they are making, contributing to even stronger inflation. This could see the Federal Reserve having to hike interest rates faster than currently expected; and while this is usually a positive thing for the US dollar, stock markets are afraid of the impact of a sudden rise in borrowing costs upon companies and economy. The volatility seen in the share market spilled over into the currency market and so traders have withdrawn from the US dollar into alternate stable currencies, such as pound Sterling. | 
