The Bank of England cut interest rates 25 basis points to 5.00% as expected. The European Central Bank left rates unchanged at 4.00%. The British Pound�s slide since November has somewhat helped exporters however slow growth is biggest worry for now.
News and Events:
The Bank of England cut interest rates 25 basis points to 5.00% as expected. The cut was justified by tightening credit conditions and slowing growth. On the flip side, high inflation remains a concern and will be watched closely. The British Pound�s slide since November has somewhat helped exporters however slow growth is biggest worry for now. The British Pound traded at 1.9755 in the early session.
The European Central Bank left rates unchanged at 4.00% however the EURUSD did not manage to hold on to gains while trading at 1.5900. The pair slipped to 1.5820 since the announcement. ECB President Trichet insisted that he is against volatility in exchange rates and looking for specific statements regarding this issue from the G7 meeting which begins today.
Today’s Key Issues (time in GMT):
11:00 EUR Euro-Zone OECD Leading Ind. FEB
13:30 CAD New Housing Price Index MoM FEB 0.40% vs 0.60%
13:30 USD Import Price Index (MoM) MAR 2.00% vs 0.20%
13:30 USD Import Price Index (YoY) MAR 13.60% vs 13.60%
15:00 USD U. of Michigan Confidence APR P 69 vs 69.5
The Risk Today:
EurUsd: move down from 1.5914 is a warning sign that the pair is losing steam moving upwards. Support remains at 1.5672 to trigger a bigger move down.
GbpUsd: remains in a strong bearish trend below 1.9843. More doors open on the downside below 1.9650.
UsdJpy: searching for 100.00 for a break down to 0.9875 and 96.88. The pair needs a break above 103.30 for any hopes of trend reversal.
UsdChf: support holding at 0.9871 while the resistance holds at 1.0250.
Resistance and Support:
By James Brandt - ACM Advanced Currency Markets, Geneva, Switzerland