We have another one of our hugely successful ‘Bank of England’ webinars this Thursday at 14.00 GMT. Last month’s predicted the GBP rise to 1.10 and 1.63 against the euro and the dollar respectively; what will we predict on Thursday? Find out what we think the potential move in QE will do for the pound before anybody else! Email me at research@worldfirst.com if you need an invitation

t was as if last week never happened. Risk was bid as commodity currencies surged against the US dollar while volatile markets like copper and gold also moved higher. With the sheer volume of data out this week it was always going to be a strange 5 days; we’re more bemused than anything.

The RBA decided that a 25bps hike in rates was the prudent course of action for the Australian economy at this juncture. The accompanying statement was also a little more dovish than had been expected and as such AUD has softened a little overnight. The next major bank to publish its decision is the US Fed, due tomorrow night, before the Bank of England and ECB double whammy on Thursday.

Sterling was pressured lower as the correlation between it and the UK financial sector weighed. RBS and Lloyds Banking Group are bargaining with HM’s Government over balance sheet issues and taxpayer control which will see company sales in the former’s case and a £25bn rights issue in the latters’. I doubt GBP will get much support from the market before Bank of England; the risk is fairly evident. The UK manufacturing sector did surprise to the upside however; the PMI release coming in at 53.7 which happened to be the series’ 3^rd highest reading in history and the sharpest increase in nearly 6 years.

Today is the quietest day of the week data-wise with only UK Construction PMI figure at 09.30 and US Factory Orders at 15.00

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