All this and more is available on our video blog at http://uk.youtube.com/user/WorldFirstJC

Well we were right to be concerned about the event risk that the Bank of England and ECB posed to GBP’s recent strength as yet another pound rally found 1.13 a bridge too far.

The MPC have been keen in previous months to not shock the market by doing anything unexpected and leads us to one negative result and one positive future expectation. The fact that it was a surprise and the QE figure now sits at £125bn saw sterling fall slightly and therefore we believe that the Bank of England think sentiment behind GBP has increased to such a level that they do not have to mother it.

The ECB decision went as expected with a 25bps cut that took the interest rate to its lowest since the euro was launched. The market reaction to Trichet’s comments was to reward the single currency for Trichet’s ‘quantative easing light’ and musings that the ECB rate may fall further. The move saw GBP/EUR break into the 1.11s and EUR/USD hit a peak of 1.3465.

The results of stress tests on US banks showed that 10 of the 19 banks that were surveyed need additional capital. Equity markets were mixed on the day as investors sought refuge in cash as the results came to light.

The data calendar doesn’t get any less risky today with US Non-Farm Payroll figures due at 13.30. ADP on Wednesday and Initial Jobless Claims yesterday were both better than expected so risky assets may receive a Friday afternoon boost as a result. Data from the UK is also due with PPI expected to weigh on sterling.

World First’s Twitter page is up and running and we will be live ‘tweeting’ the impact of all these data releases and how they affect the markets. Click below for up-to-date news on all things currency. The address is http://twitter.com/World_First

Have a good weekend

Please feel free to contact me jeremy.cook@worldfirst.com(jeremy.cook@worldfirst.com) if you have any questions or thoughts regarding these updates or if you are interested in a particular event in the calendar. If you would like to discuss your foreign exchange requirements, please contact our: Corporate Foreign Exchange on 020 7801 9050 or ourPrivate Client Currency Exchange on 020 7801 9080. Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice. Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms..

To view any past or present currency blogs please click on the following link www.worldfirst.com/blog

You Might Also Want To Read

• US Bailout Helps Risk Appetite - World First’s Morning Update - 29th January 2009
• World First’s Morning FX Update - 7th August 2008
• FX Markets Wait For Bail-Out Plan Progress - World First’s Morning FX Update - 25th September 2008
• Dollar Weakens Over Continued Fears - World First’s Morning FX Update - 18th September
• World First Foreign Exchange 2 September 2009 Update: September Swoon For Sterling and Stocks
• World First Foreign Exchange 3 December 2009: Market Close Podcast
• Sterling Higher On IP, Japanese GDP Helps Risk Profile - World First’s Currency Exchange Morning Update - 11th June 2009
• World First - Sterling Update - 13th October - Sharemarket Crash Leaves Sterling Under Pressure
• Sterling Stuck Before FOMC, Unemployment - World First’s Currency Exchange Morning Update - 18th March 2009
• Darling’s between a Rock and a Hard Place
• World First Foreign Exchange 11 August 2009 Update: Has the dollar / risk relationship broken down?
• World First Foreign Exchange 24 September 2009 Update: Silence Is Golden For Pound
• Bond Yields Rise, Dollar Bends But Doesn’t Break - World First’s Currency Exchange Morning Update - 29th May 2009
• Missiles Up and Sterling Follows - World First’s Morning Update - 6th April 2009
• UK Inflation Surprises To The Upside, ZEW Also - World First’s Currency Exchange Morning Update - 17th June 2009
• Bank of England minutes dent Sterling prospects - Morning Update - 18th June 2009
• World First Foreign Exchange Podcast - 5 November 2009
• World First Foreign Exchange 16 November 2009 Update: European Recession Is Over
• World First Foreign Exchange Podcast - 9 October 2009
• World First Currency Research Blog Contributors
• World First on Investment Week - 15 June 2009
• Inflation Soars as Recession Looms - World First’s Morning Update -15th October 2008
• Bank Shares Keep Sterling Under Pressure - World First’s Morning Update - 22nd January 2009
• World First Foreign Exchange 13 January 2010 Update: China Raises Liquidity Provisions
• World First in the press: Sunday Times 20 July
• World First Foreign Exchange 10th July 2009 Update: Bank Holds Off Extension, Sterling Holds Up
• World First’s Morning FX Update - 20th June 2008
• Volatility Continues As World Waits - World First’s Morning FX Update - 26th September 2008
• World First Foreign Exchange 24 November 2009 Update: Dollar’s Day of Data; GDP, Consumer Confidence, Fed Minutes
• World First Foreign Exchange NZD / AUD Update: 30 November 2009
• Wednesday 4th June
• FX Markets Confusing Before Data - World First’s Currency Exchange Morning Update
• FOMC Shock The Markets - World First’s Morning Update - 17th December 2008
• World First Currency Exchange Podcast - 9 September 2009
• Sterling Breaks Lower Against Euro - World First’s Morning Update - 18th December 2008
• World First Foreign Exchange 17 August 2009 Update: Consumer Sentiment Dents The Risk Rally
• World First Foreign Exchange Podcast - 7 October 2009
• Sterling Hurt by Retail Sales Fall - World First’s Currency Exchange Morning Update - 19th June 2009
• World First NZD/AUD Weekly Update - 20 July 2009
• World First NZD/AUD Weekly Update - 11th May
• World First in the press: Independent 19 January
• Sterling Higher Although Fears Grow Over Long Term Prospects - World First’s Currency Exchange Morning Update - 15th May 2009
• Profit Takers Take Pound Lower - World First’s Morning Update - 13th January 09
• World First in the press: telegraph.co.uk 19 January 2010
• World First Foreign Exchange 20 July 2009 - Earnings results disappoint as the IMF temporarily dent sterling’s prospects.
• Dollar strengthens as Fed holds rate and QE, SNB intervenes -World First’s Currency Exchange Morning Update - 25th June 2009
• World First’s Morning FX Update - 4th August 2008
• Wednesday 14th May
• GDP Lower = Sterling Lower - World First’s Morning Update - 27th April 2009
• World First’s Morning FX Update - 8th July 2008