Sterling strength could continue throughout 2014, says ECU

Sterling will continue to strengthen this year as investors continue to price in an earlier-than-expected rate rise, according to currency group ECU's head of trading and execution.

Sterling has risen to a two-and-a-half year high of above 1.66 against the dollar this week, as better-than-expected unemployment figures provided the latest sign of a burgeoning economic recovery. The Bank of England has again insisted it sees “no immediate need” to hike the base rate of interest, but investors are continuing to bring forward their expectations for tighter policy. Neil Staines, head of trading and execution at ECU, said he expects the Bank to raise rates in Q4 this year, meaning sterling strength is likely to continue in the meantime. Staines acknowledged the poun...