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Overnight GBP/EUR has broken through the 1.13 level, an area that has proved to be a piece of resistance 9 times in the past 2 months. On any normal day this would preclude a rise into the 1.15s but as we know this is no normal day.

Both the ECB and BoE announce their interest rate decisions this afternoon. The Bank of England’s meeting will be a formality on the interest rate side of things with the consensus believing that the MPC will hold rates at 0.5% while keeping the quantitative easing figure at £75bn. An expansion of this £75bn has been rumoured in order to bring down market interest rates but the MPC has been keeping mum on this recently.

The ECB decision is another kettle of fish however. The market expects that they will cut rates by 25bps while the post-match press conference may halt any sterling rally should Jean Claude Trichet rule out quantative easing.

In essence the one thing that has defined recent sterling rallies is the length of time they last; not long. We have definite risk at 12.00 (Bank of England) and 12.45 (ECB decision) and would advise all clients who trade with the euro, be they buyers or sellers, to contact their respective dealer.

ADP employment was much better than expected yesterday which allowed risky assets to continue their recent expansion.

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..

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