LONDON: Sterling slipped versus a strengthening euro on Thursday as the European Central Bank’s March meeting minutes came in more hawkish than expected.
ECB policymakers appeared keen to roll back stimulus at their March 10 meeting and argued that conditions for lifting rates had either been met or were about to be met, the accounts of the meeting showed.
The pound, which had surged to an almost two-week high of 83.15 pence versus the euro in early London trading, fell 0.25% to 83.56 pence at 1355 GMT.
“The minutes of the ECB’s March policy decision had a ‘hawkish tilt ...(and) the EUR staged a moderate rally”, said Stephen Gallo, European Head of FX Strategy at BMO Capital Markets.
Recent euro weakness against the pound had been influenced by the upcoming French elections, with eurosceptic, far-right candidate Marine Le Pen, closing in on President Emmanuel Macron in the polls.
That added to jitters that have put the euro under pressure since the beginning of the war in Ukraine.
“The single currency is more exposed to concerns about energy security than the pound but in addition some nervousness is apparent in the market ahead of the first round of the French election this weekend,” said Jane Foley, head of FX strategy at Rabobank London.