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The FOMC meeting overnight yielded little surprise as the committee once again stated that they intend to complete the $600bn worth of purchases prescribed under the QE2 plan. They did however say that the recovery was on “a firmer footing” than it had been some months ago, mainly on the back of a falling unemployment rate and an increase in retail sales. This was not enough to arrest the dollar’s slide however as it remained weak against a basket of currencies.

Indeed much of the market movement yesterday was a bit of an afterthought after what is happening in Japan. Portugal’s credit rating was downgraded by Fitch overnight but only lost 0.1% as traders focused elsewhere. This fits in with our belief that once issues from MENA and Japan are sorted the euro will once again start to slide. Indeed, GBPEUR hit a 6 month low yesterday as investors piled into the single currency. We believe that those clients of ours who are looking to sell euros and buy sterling, clients with a single farm payment for example, should look at acting now.

Issues in the MENA region also took a back seat yesterday causing the oil price to lose over $5 in trade, a trend that people will hope continues. There was a short term jump after news reached us of a Saudi soldier being shot by a Bahraini protestor although this was denied by the Saudi government a couple of hours later.

We expect GBP to come under pressure today as a result of the ILO employment measure and jobless claims numbers due at 09.30. Claims are expected to rise by around 1.3k. There is a fair bit of US data due this afternoon with the highlight being PPI at 13.30 although you would once again expect Japan to dominate news flow.

Latest exchange rates at time of writing