by Jack Smith
Sterling has touched a fresh record high versus the euro this morning, its strongest since March 7th 2008, or almost 7 years, at 1.2929.
The pound has strengthened, because the European Court of Justice has okayed a bailout scheme that allows the European Central Bank to spend trillions of euros buoying up Eurozone countries.
Sterling rises, as ECJ okays bailout plan
Sterling has hit this 7-year high, because the European Court of Justice has given its blessing to Official Monetary Transactions, an ECB scheme to help ailing Eurozone members.
With OMTs, the European Central Bank can buy the bonds of Eurozone countries, thereby cutting the overall interest rate these countries pay, allowing them to finance themselves.
The European Court of Justice called OMTs "necessary" and "in principle legitimate".
This lifted sterling versus the euro, because it hence opens the door to the ECB spending trillions of euros to boost ailing Eurozone states, in the process devaluing the currency.
