ECB and BoE Maintain Current Policy, Comments From President Trichet Could Move Marke

The European Central Bank kept the key interest at 1.00%, which is the lowest level on record, and all eyes will be focused on President Trichet as he’s scheduled to hold a Q&A session at 12:30 GMT.

[B]Fundamental Headlines[/B]

• [I]Bernanke Urges Deficit Reduction[/I] – Wall Street Journal
• [I]Morgan Stanley poaches UBS derivatives heads[/I]– Financial Times
• [I]Global food import bill set to fall[/I]– Financial Times
• [I]U.K. House Prices Unexpectedly Climbed in May, Adding 2.6%, Halifax Says [/I]– Bloomberg
• [I]BOE Keeps Benchmark Rate Unchanged, Refrains From Expanding Stimulus Plan[/I] – Bloomberg

[B]GBPUSD[/B] – The Bank of England held the benchmark interest rate steady at the record-low of 0.50%, and maintained its GBP 125B asset purchase program in order to steer the economy out of its worst recession in over half a century. The central bank said that they will continue to review the scope of the program, and went onto say that it will take another two-months to complete the current policy in place. Meanwhile, the U.K. Halifax home price index unexpectedly increased 2.6% from April, while property values slipped 16.3% during the three-months through May amid expectations for a 17.2% drop, and the data suggests that the downturn in the housing market could be nearing a bottom as policymakers continue to take unprecedented steps to shore up Europe’s second largest economy. For more news and resources, visit the Pound Currency Room.

[B]EURUSD[/B] – The European Central Bank kept the key interest at 1.00%, which is the lowest level on record, and all eyes will be focused on President Trichet as he’s scheduled to hold a Q&A session at 12:30 GMT. Nevertheless, retail spending in the Euro-Zone increased 0.2% in April, which was in-line with expectations, while the annualized rate of private consumption fell 2.3% from the previous year amid forecasts for 2.9% drop. The breakdown of the report showed discretionary spending on food and drinks increased 1.1% from the previous month, while demands for non-food products slipped 0.2%, and the data encourages an improved outlook for future growth as the European Central Bank anticipates economic activity to stabilize later this year. Discuss the topic and your trade ideas in the EUR/USD Forum.