By Nigel Hodges of Currency Solutions

While Bernie Ecclestone has very little to do with the global exchange markets, the disarray and constant flip-flopping of new Formula One rules have been mirrored by a particularly topsy-turvy week for Sterling.

Earlier in the week, the Pound reached a six-week high against the US Dollar and gained 1.3% against the Euro. This sudden rise followed surprising news that the Consumer Price Index - a key indicator of inflation - rose during March from 3% to 3.2%, according to figures from the Office for National Statistics.

It was also announced this week that the Retail Prices Index - another key measure of UK inflation - has fallen to zero for the first time in 49 years. The RPI, which includes housing costs, fell to 0% in February on an annual basis from 0.1% in January. The fall in RPI, as recorded in the latest Office for National Statistics data, stems largely from the fall in mortgage repayments after a series of interest rate cuts.

Once the pair of announcements had been digested, Sterling gave back some of the previous session's gains as investors reconsidered the unexpected rise in inflation.