·         Speculators wait for Bank announcements

·         Market believes end to QE in the UK probable

·         ADP release better than expected, best in nearly 2 years

·         Euro stronger on Greek plan

All this and more is available on our blog. Click here  http://www.worldfirst.com/blog

So, big day then. Big big day. The pound has had a fair few important days in the past 2 years. Today is however the first of 3 big days in the coming weeks for the pound.

If you cast your mind back to the August ‘09  decision you will remember that we were in a similar position as we are now. Concerns over our debt, GBPEUR hovering between 1.13 and 1.16 and the market expectation that QE was due to end. The MPC however decided to extend and it has taken sterling until now to dig itself out of the hole. A similar thing would happen today; should we see the MPC hold QE and interest rates and release a fairly dovish statement that would see a very marginal sterling move higher. Conversely should they extend QE we could see the 1.11s and 1.56s by the end of the week. For a rundown of the decision and what it will mean to the pound you can dial in to our webinar on the subject at 14.00 GMT. If you don’t have an invitation email research@worldfirst.com for a replacement.

Sterling is not entering the battle in the best of shape. It was weakened yesterday by a poor PMI from the services sector and good data elsewhere.

US ADP employment which is used as a good bellwether for Friday’s Non-Farm Payrolls announcement, showed the smallest fall in private sector employment in nearly 2 years. This leads us to believe that Non-Farms may finally turn positive tomorrow. US dollar strengthened as a result, pushing the pound below the 1.59 level again whilst also pushing the euro back in to the 1.38s.

The euro did make some ground back yesterday as Brussels gave a press conference on the exact ramifications of the Greek ‘plan’. Greece has been told to slash public sector pay, enact new taxes and set aside at least 10% of its total government expenditure as a firefighting fund for the future. As harsh as it may sound this is good news for Greece; you have to remember that the fear over the January period was that they would be left to the wolves.

The main news today will be the Bank of England (12.00) and the ECB announcements (12.45) followed by Initial Jobless Claims at 13.30