Last week saw some well needed respite and recovery for Sterling over the recently mighty Euro. The land mark events were of course the interest rate decisions on Thursday afternoon, and what seemed like for once in a long time there were absolutely no shocks.

So expected was the 50 basis point cut from the B of E and the all hold form the ECB that currency traders looked beyond the immediate potentially negative effects of a base rate cut and instead viewed this as a positive move coming for the British economy. Couple with this what can only be said to be disastrous data from Germany where industrial output plummeted by 4.6% in December, the worst slide in like for like information since 1989 then we can begin to see why Sterling had such a good week. Indeed it may well continue to do so for part of this week to come.

What will be seen as concerning for Sterling are the Inflation and Unemployment reports on Wednesday and indeed the EZ GDP release on Friday. Whilst it is tempting for those looking to buy euros from Sterling to punt on last weeks trends continuing, if the need for the currency is still some time off then utilising a forward time option under current market conditions would certainly seem a calculated move.