By Alex Ellis

Sterling currency movement yesterday

Sterling saw a slight recovery yesterday as it seemed that yesterday’s Bank of England inflation survey showed that expectations for inflation in 2010 were slightly higher than expected. This was seen as a positive because high inflation normally leads to a hike in interest rates and this will in turn attract investors and make the pound a more sought after currency.

The potential impact of the Bank of England minutes

Next week sees the Bank of England minutes released and the effect of this release could outline the long term future of sterling exchange rates. I am under the opinion that if any extension to Quantitative Easing is announced then this could cause sterling weakness. In the past when this form of announcement has been made it has caused sterling weakness and therefore this is highly likely.