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Sterling steady with QE on hold

There's been little movement in the markets since yesterdays BoE and ECB decisions though we're awaiting a Non Farm Payrolls report which will likely shift the dollar.

Pound Sterling – UK Markets

Yesterday The BoE’s monetary policy committee voted to keep interest rates on hold at 0.5% and not to extend its £200bn programme of cash injections into the UK economy.

The decision, which was widely expected, comes after mixed signs on the state of the economy in the early months of the year. This morning at 0905 GMT the pound traded at USD1.5026 and EUR1.1063.

US Dollar – US Markets

The dollar, coming off a fairly bearish week, could well see a reversal of fortunes today with the Non-Farm Payrolls Report set to be released at 1330 GMT.

A figure that meets or exceeds expectations will likely increase investor confidence in the US economy, and could lead to major gains for the greenback.

In addition to the NFP report, those making a dollars transfer will want to look at the official US unemployment rate which will also be published at 1330 GMT. While this is generally seen as a lagging indicator, the figure could influence USD for the foreseeable future. This is especially true as next week does not have a lot of major USD news events.

Euro – European Markets

Earlier this week, the euro was able to see some considerable gains following a more detailed plan for a Bailout in Greece. Following the ECB decision to keep interest rates at their record lows, as well as the announcement from the head of the ECB that EU growth would be uneven; the Euro slipped back into downward descent.

EUR/USD is currently trading at around the 1.3590 level, down almost 90 pips from yesterday afternoon. EUR/GBP is also marginally down, having dropped almost 30 pips since yesterday to its currently level of 0.9034.

Other Currencies – Highlights

New Zealand’s dollar has been the worst performer among major currencies this week, sliding 1.5% on speculation the central bank will keep borrowing costs at a record low at its next policy review. It declined to 68.52 cents yesterday, the lowest level since Feb. 25th.

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