The Pound exchange rate performed well again yesterday as markets reacted to some better-than-expected UK industrial output data. Beating estimates of 0.1%, the yearly industrial production figure for March came in at a six-month high of 0.7% thanks to a surprise uptick in oil and gas extraction. Manufacturing output also beat the market consensus with a print of 1.1% compared to forecasts of 1.0%. All in all the robust industrial data is not expected to bring about an upgrade to the first quarter’s GDP print of 0.3%, however, the National Institute of Economic and Social Research (NIESR) did announce that growth was likely to have accelerated to 0.4% during April.

Traders will be on the lookout today for any signs of hawkishness from the Bank of England’s latest quarterly inflation report. A potential uptick in UK wages or a downtick in British unemployment could also give Sterling a fresh lease of life on the currency market.

Euro

Sterling retained a strong exchange rate against the Euro yesterday, buoyed by sanguine UK industrial output numbers and fears in Europe that Greece is rapidly approaching the bottom of the barrel in terms of public finances.

Traders were encouraged on Monday when the Hellenic nation announced that it had completed a €750 million payment to the IMF, but encouragement turned to dismay when it emerged that the payment had been made with funds from Greece’s emergency holding account at the IMF itself. This was seen as a clear sign that the Hellenic nation will need to agree upon a deal sharpish if it is to avoid an unprecedented exit from the Eurozone.

Data wise, the single currency could receive a boost this morning if Eurozone growth prints at 0.4% as expected for the first quarter, as this would mark a stronger score than both Britain (0.3%) and the US (0.05%).

US Dollar

Yesterday morning’s better-than-anticipated industrial production report was the catalyst for another surge in support for Sterling against the US Dollar yesterday. The Pound climbed two cents against the ‘Greenback’ during the day to strike a fresh 2015 high ahead of today’s key inflation report from the Bank of England.

Sterling bulls will be looking for hints that some policymakers are ready to start raising interest rates in the UK in the foreseeable future. But with GBP/USD five cents higher than it was last Thursday, there is considerable scope for a rebound lower if markets are disappointed by the BoE statement. Indeed, profit taking could easily hit ‘Cable’ tomorrow even if the British labour market figures and inflation report are only considered mildly, not massively, encouraging.

Canadian Dollar

The Pound to Canadian Dollar exchange rate rallied initially yesterday on the upbeat UK manufacturing report but demand for the ‘Loonie’ surged later on in the day when OPEC announced that demand for oil was likely to be higher than initially anticipated this year. The OPEC statement sent crude higher by around 2.5% and this bolstered the appeal of the commodity-sensitive ‘Loonie’.

Australian Dollar

Sterling remained fairly flat against the Australian Dollar yesterday, close to a two-month high, as markets reacted to comments from Australian Treasurer Joe Hockey suggesting that the budget deficit will be lower-than-expected this year. The encouraging remarks helped the ‘Aussie’ avoid further losses against the surging Pound.

New Zealand Dollar

Worries that the Reserve Bank of New Zealand could be on the verge of a mini rate-cutting cycle and hopes that the Bank of England could start raising rates sooner-than-anticipated sent the Pound higher by around two cents to a fresh four-year high against the New Zealand Dollar yesterday.