Sterling trades at two-week high against euro thanks to Bank of England

Sterling rose in European trade against the euro, maintaining gains for the sixth straight session and almost hitting two-week high thanks to Bank of England. 

Following recent UK inflation data and bullish statements from BoE members, investors now are certain the BoE will raise interest rates in May while the European Central Bank's position remains uncertain.

EUR/GBP fell 0.15% to 0.8739, with a session-high at 0.8755, after the pound rose 0.1% yesterday against the euro, the fifth profit in a row, hitting two-week highs at 0.8729.

Bank of England

UK consumer prices rose unexpectedly in February, raising inflationary pressures on BoE's policymakers.

BoE governor Andrew Bailey said there might be a need for multiple more rate hikes if signs of inflation persisted.

Now markets heavily expect the BoE to raise interest rates by 25 basis points at the May 11 meeting to 4.5%, the highest since 2008.

ECB

Otherwise, the European Central Bank's latest policy meeting was unclear about the future of interest rates even though it remained committed to policy tightening.

However, a sharp slowdown in European inflation during March cast doubts about upcoming interest rate hikes by the ECB.